We’ve all been there. A friend or family member needs money and asks you for a loan. You want to help, especially if it’s someone you’re close to. However, the time to decide how much you can float them is not in the middle of their crises. (Read the article to find out why.)
You will be extremely nervous when the market crashes without one year of cash set aside. With one-year cash reserves, you have enough to stop distributions from your investments and wait out the market storms.
Your money should be invested in different asset classes depending on your goals and overall plan. Besides maintaining an emergency account, there is no reason to let your money sit idle. Stocks, bonds, real estate, or any cash-flowing investment are all good options.