By John Sage Melbourne.
When you think of what it means to be solvent,you might think of earning enough,but you also require to consider how much you have actually conserved,and how much you are frequently conserving.
In a nutshell,you require to be able to live off your emergency fund for at least 2 months. Have a good think of that,because you ‘d be shocked by how much you require simply to manage week to week.Just how much you require is not a set figure. Personal financing professionals disagree over how much cash to keep in an emergency fund. It actually does depend upon the stability of your income and expenses.
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If you have a routine 9 to 5 job with strong job security and your expenses remain even month-to-month,I think an emergency fund of one or 2 months’ expenses is enough,so long as you have extra resources you can draw on when in requirement (a credit card,a stock portfolio,and so on). If your income is erratic or your expenses differ extremely,then aim for closer to 6 months of expenses.
Itdeserves keeping in mind that your personal emergency fund is entirely different from your rental cash reserves. As a property manager,you ought to be keeping a substantial cash reserve to cover rental property expenses.
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