Everyone wants to talk about what to invest in. Very few want to talk about the buffer. And yet, it is what decides whether you’ll stay invested when things get ugly.
What it’s really for
An emergency fund covers the unexpected —a breakdown, a month without income— without forcing you to sell your investments at the worst moment. It’s insurance you pay to yourself.
How much and where
As a reference, three to six months of your expenses, in a liquid, boring account you can reach right now. It’s not chasing returns; it’s chasing a good night’s sleep. With that buffer in place, investing stops being a bet and becomes a plan.