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Where Should You Invest To Create An Emergency Fund?

We all hope that life will go well day after day, that everyone we love will stay healthy, that we are secure in our jobs and that the paychecks will continue to come in, that our home will stay safe, and so forth. While most American’s are fortunate to have relatively cozy, secure lives, the fact is that unexpected, “bad”, and expensive things can and do happen, and usually without notice. This is why it is imperative to have an emergency fund to see your family through the difficult times.

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How much do You Need?

Financial guru Suze Orman used to recommend that most families have 6 months’ worth of income saved for emergencies. But after the financial crash of 2010 Orman increased that amount. Based on how many people struggled to get out from under low value homes and to find new jobs after theirs were cut, she now recommends that people have a full 18 months’ worth of pay in an emergency fund. For many people this seems like a ridiculous and unattainable number, but the truth is that the more you have the better off you are. A good rule of thumb might be to ensure you have at least 6 months saved, but make saving 19 months’ worth a goal.

But how can you save that money? A more importantly, what invests or decisions can you make to ensure that you grow your investment and yet also have money that is liquid?

1.    Go for bonds shares and annuities.

Investing in bonds an annuities offers a low interest but very safe way to invest your money, allowing it to grow, be kept safe, and yet also be liquidated easily if the need arises. Buying into annuities can be a great way to save money for retirement as well. But if you have an annuity already, like if you purchased one with the plan of using it later, you might be able to sell those payments now or cash it in if an emergency arises.

Invest in structured settlements.

Structured settlements can be a way to earn money and a way to get liquid cash. If you are looking to invest your money and earn a healthy return, buying structured settlement payments from someone (or investing with a company) now can be a good way to take your lump sum of cash and store it away for the future. If you were the recipient of structured settlement payments (through a lawsuit or inheritance, for example), then you can sell structured settlements to gain access to a lump of cash in case of an emergency.

3.    Invest in metals such as gold and silver.

If you have some money that you want to keep somewhere safe, while also letting it grow, precious metals such as gold and silver are always a good bet. These metals are always in demand and are easy to liquidate. You also have the option of physically purchasing and holding the metal and depositing your money with a company that buys gold and silver. Such investments are easy to liquidate when you need access to your cash.

Keep Your Family Safe

If someone falls ill, you get hurt, or things become unstable in your job, having some emergency funds on hand will be an important part of ensuring your family’s financial future.