Should You Start Investing During a Pandemic?
You might consider taking advantage of the volatile market by investing your savings or incentive check.
But according to Ramit Sethi, author of I’ll Teach You To Be Rich , you must invest in yourself before throwing money into the stock market.
First, Sethi says, bet on having a one-year emergency fund. You have to calculate how much money you need for 12 months of spending, and accumulate this amount in savings. (Remember, this isn’t just your annual salary – you can probably get on with your life by spending less than you earn.)
Once your emergency fund is in place, you can start investing any additional money in the trust fund. These products are specially formulated to grow in the long term and change based on your age. These funds are for “long-term money” – money that will not be needed for at least 10 years. The market is too volatile right now to make quick profits by investing in individual stocks. A fixed date fund is a stable way to provide consistent returns over the years.
Sethi advises opening a high-yield savings account for “short-term money.” He says that you are not going to make real profits from these accounts, just know that your money is safe and you can access it whenever you need to.
And if you are in arrears, it’s better to continue with the minimum payments during this indefinite time – instead, you should focus on creating this emergency fund. Sethi points out that if you’re fired or saddled with unexpected medical bills, you’ll need to access those funds in cash .