So you have decided to start investing and want to learn how to trade stocks. While that ambition to learn about investing is great it may not be very wise. Many people decide to enter the stock market without having an emergency fund in place. They simply do not understand that investing in stocks can be very risky especially for a beginner. Before you invest in anything you need to make sure you and your family are protected from any kind of emergency such as the loss of a job or illness.
Many believe that you need to have at least 3 months worth of living expenses in a safe easy to access account. However, I personally believe you need to have at least 6 months of savings set aside for emergencies. You should never invest money you can not afford to lose; otherwise, you are gambling with your well-being.
Now even though you should not use an emergency fund in risky investments such as stocks; you can still receive a decent return by using a simple high yield online savings account. These accounts will earn you anywhere from 4%-5% APY which is very good for a safe and simple FDIC insured savings account.
So while you may be eager to start investing with the hopes and dreams of hitting it big in the stock market; just remember a wise investor does not gamble with money they can not afford to lose.
For more information visit: www.lucky-dog-investing.com/emergency-fund.html and www.lucky-dog-investing.com/high-interest-investing.html
Chad Surges has a Bachelor's Degree in Business. He invites you to visit his website: Lucky Dog Investing Article Source: http://EzineArticles.com/?expert=Chad_Surges |  |
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