{"id":355399,"date":"2023-11-15T11:05:00","date_gmt":"2023-11-15T03:05:00","guid":{"rendered":"https:\/\/www.ziet.co\/v2024\/?p=355399"},"modified":"2024-09-27T11:10:10","modified_gmt":"2024-09-27T03:10:10","slug":"do-you-have-emergency-fund","status":"publish","type":"post","link":"https:\/\/www.ziet.co\/v2024\/newsletter\/do-you-have-emergency-fund\/","title":{"rendered":"#18 Do you have emergency fund?"},"content":{"rendered":"\n

<\/path><\/svg><\/span><\/span>Estimated reading time: <\/span>5<\/span> minutes<\/span><\/p>\n\n\n

\"#18<\/a><\/figure>\n\n\n

Timely updates to supercharge your wealth-building journey!<\/p>\n\n\n\n

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TABLE OF CONTENTS<\/strong><\/h3>\n\n\n\n
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  1. Do you have emergency fund?<\/a><\/strong><\/li>\n\n\n\n
  2. Word of the Week: Margin<\/a><\/strong><\/li>\n\n\n\n
  3. Key economic dates: PPI (Oct), Initial Jobless Claims<\/a><\/strong><\/li>\n\n\n\n
  4. What I\u2019ve been reading<\/a><\/strong><\/li>\n<\/ol>\n<\/div>\n\n\n\n
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    Do you have emergency fund?<\/strong><\/h3>\n\n\n\n

    Driving on a highway, music loud, windows down \u2013 and then, BAM! \ud83d\ude31 A sudden car accident! Now you’re staring at RM 10,000 in bills, wishing you had an emergency fund to get it through \ud83d\ude22.<\/p>\n\n\n\n

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    Why Cash Still Wears the Crown<\/strong><\/h4>\n\n\n\n

    Emergencies are like uninvited guests \u2013 they never RSVP. Whether it\u2019s car breakdowns, health hiccups or unexpected layoffs, these rainy days don’t care if you are ready for it. And your emergency stash? It\u2019s umbrella in a storm \u2614\u2013 not making you rich, but certainly keeping you dry.<\/p>\n\n\n\n

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    Golden rule: Aim for 3-6 months of living costs.<\/strong><\/h4>\n\n\n\n
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    Quick math: if your monthly costs are RM2,600, you\u2019re looking at keeping RM7,800 to RM15,600 tucked away. Remember, this isn\u2019t a one-size-fits-all! Dealing with some heart condition? You may extend it to a 24-month stash, just to be safe.<\/p>\n\n\n\n

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    Low on cash but you need it NOW? \ud83d\udcb5<\/strong><\/h4>\n\n\n\n

    Some tips if you need the money right now:<\/p>\n\n\n\n

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    1. Credit Cards<\/strong>
      Yes their interest is sky high, but having instant cash on your hands might be the utmost importance when emergencies happen. Surely not the cheapest thing, but it gets the job done. Pro tip: Check out cash advance features with banks like CIMB or Maybank.<\/li>\n\n\n\n
    2. Loans<\/strong>
      If you have a good credit score, some banks may say yes as fast as 10 mins, few hours or days. (But brace for those interest rates!)<\/li>\n\n\n\n
    3. Medical Cards<\/strong>
      A simple stroke treatment? RM35k to RM75k in a private hospital. Your card can be that safety net you need, and it’s affordable (and no, I’m not sponsored by insurance giants, it\u2019s just Ziet speaking \ud83d\ude4b\u200d\u2642\ufe0f). RM200\/month can net you coverage up to a cool million. How’s that for peace of mind?<\/li>\n<\/ol>\n\n\n\n

      Got Extra Cash? \ud83d\udcb0<\/strong><\/h4>\n\n\n\n

      If you have some extra cash lying around, here are some options.<\/p>\n\n\n\n

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      1. Fixed Deposits<\/strong>
        One example Maybank\u2019s eFixed Deposit that can offer you 2.70% interest per annum starting from a 1 month tenure up to 3.10% for a 13-35 months tenure.
        Pro-tip: In general, banks give a higher FD rates (visiting their physical branch) compared to the e-FD (have it done online).<\/li>\n\n\n\n
      2. Money Market Funds<\/strong>
        Platforms like TnG GO+ or Stashaway might lure you with ~4% returns. Money market funds are considered as safe investments, but do take note that the word \u201cinvestment\u201d means your savings is not insured by PIDM.<\/li>\n\n\n\n
      3. US Stock Market<\/strong>
        High-risk, high-reward. An initial $1,000 in 2010 in the S&P 500? By 2020, you’re chilling at around $3,620. To counter the volatility in US stock market, you have got to be ready for long time commitment!<\/li>\n<\/ol>\n\n\n\n

        So, whether you’re stashing or splurging, remember, emergencies are unpredictable, but your finances don\u2019t have to be.<\/p>\n\n\n\n

        If you\u2019re interested in the US stock market option, I have an exclusive rewards for you! If you sign up for M+ Global rewards, you will receive x6 units of GRAB shares – yes, it\u2019s the Grab you order for food and rides! If you\u2019re concern about the shariah compliant, or simply not interested in Grab, you can also choose to receive trading vouchers that worth around USD 20!<\/p>\n\n\n\n

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        Click Here to Get Free GRAB Shares X6 from M+Global!<\/strong><\/a><\/div>\n\n\n\n
        Or Here If you Prefer Trading Voucher<\/strong><\/a><\/div>\n<\/div>\n\n\n\n
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        Word of the Week: Margin<\/strong><\/h3>\n\n\n\n

        Definition: Margin refers to the difference between the total value of securities in an investor’s account and the loan amount from a broker. Essentially, it’s borrowed money that allows investors to buy more shares than they could<\/strong> with just their own funds.<\/p>\n\n\n\n

        When an investor buys on margin, they use these borrowed funds to purchase securities, hoping the value of the securities will rise. However, buying on margin comes with significant risks: if the securities decrease in value, the investor still has to repay the loan<\/strong>.<\/p>\n\n\n\n

        Imagine you want to buy shares in a company called ZietStar, which are priced at $100 each. You believe that the stock price will skyrocket soon, so you decide to purchase 100 shares, costing a total of $10,000. But, you only have $1,000 in your trading account.<\/p>\n\n\n\n

        Your broker offers to lend you the remaining $9,000 so you can buy all 100 shares immediately. This loan from your broker is called a “margin loan”, and your $1,000 initial investment serves as collateral.<\/p>\n\n\n\n

        If ZietStar’s share price shoots up to $150, your total investment value becomes $15,000. After repaying the broker’s $9,000 loan, you’re left with a balance of $6,000, which means you’ve gained a $5,000 profit from your initial $1,000 investment!<\/p>\n\n\n\n

        However, if ZietStar’s price plunges to $50, your total investment drops to $5,000. After repaying the broker’s $9,000 loan, you’d be left with a negative balance of $4,000, meaning not only did you lose your initial $1,000, but you also owe the broker an additional $4,000.<\/p>\n\n\n\n

        This leveraged buying power that margin offers can massively amplify gains, but it can also lead to devastating losses<\/strong>. So beware of what you\u2019re buying!<\/p>\n\n\n\n

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        Key Economic Dates:<\/strong><\/h3>\n\n\n\n