rainy days
short term
long term
speculation
compound interest
rainy days, emergency funds

Have you ever had a sore tooth? You know, one that really hurts like...mad?
And even though you might be mortally afraid of dentists the pain became so intense that you actually went to see a doctor on a sunny Sunday afternoon.
What relief afterwards, once the tooth is gone.

Or have you ever been taxed in too low a tax braked, maybe after you got married, finished an apprenticeship or university or started your own business? Sometimes the taxman will let you run with these seemingly nice low taxes for years on end.

Both the dentist and the taxman have one thing in common: no matter what, one day they will present you with a bill that is going to take your breath away.

There are many unforeseeable things that might come your way, and that might force you to hand over large amount of money pretty quickly. And it will happen exactly when all your money is tied up in investments that are currently about 2 meters under water.

For such cases it is really advisable to have some emergency funds socked away to cover the bill.
Licking your wounds is bad enough, but being reminded every month whilst paying of the credit you had to take on adds insult to injury.

Of course there might be times when you have to go into dept, taking a credit on short notice, but be aware that you are going to pay for it dearly.

How much to put aside? You'll have to figure it out for yourself, considering you expenses and liabilities as well as insurance coverage’s you might be carrying.
As a rule of thumb: 3 to 6 month living expenses are mostly considered sufficient.

And what to do with your emergency cash? Put it somewhere where it can be accessed within very short notice, without being penalized for doing so and where it produces as much interest ass possible.
Most likely you will end up with some sort of savings account with either a bank or the Post.
More information on these types of accounts can be found at the broker’s page.