This is a result of credit fueled big ticket purchases of which buying a home is a big component. No amount of saving will cover the housing EMIs payable over one year. To this, add EMIs of 1 or 2 cars, and you've monthly EMIs running into 1 Lakh+. Now, add monthly house-hold +

+ expense, school fee and other sundry expenses and suddenly, you'll find a family unable to sustain itself w/o cash-flow for even 3-4 months. And most important of them all -
HAVING ASSETS IS NOT SAME AS HAVING CASH.
+
+ From personal experience, I think this is what you need to do:
- Maintain between Rs 1-2 Lakhs in emergency cash at all times.
- Use your Credit Cards wisely. They can be good source of large credit in an emergency.
- Work out your monthly house-hold expenses and EMIs
+
- Build a cash-reserve to cover your household expenses for a 6-month or 1-year period.
- Consider food, electricity, mobile/internet, your kids school fee, fuel, rent etc.
- Then work out your EMI obligations and see what level of reserves you can create for them.
- Maintain+
+ this back-up fund in cash/near cash assets.
- So, that you can utilize them as per requirement and are not subject to market forces.

More from Thread

I have shared multiple information related to trading and investing through my historical data analysis by writing various articles, here's the master thread that contains all my work in one place.🧵

https://t.co/pc1jr1xBlI


https://t.co/KZJ1FKCXSp


https://t.co/pTnbkjVpr0


https://t.co/3QXmND1x6Y

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A thread, co-written by @deanmbrody:


2/ First, “X” could be lots of things. Examples: What would need to be true for you to

- “Feel it's in our best interest for me to be CMO"
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- “Feel that we both got what we wanted from this deal

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Founders leave VC meetings thinking that every VC will invest, but they rarely do.

Worse over, the founders don’t know what they need to do in order to be fundable.

4/ So why should you ask the magic Q?

To get clarity.

You want to know where you stand, and what it takes to get what you want in a way that also gets them what they want.

It also holds them (mentally) accountable once the thing they need becomes true.

5/ Staying in the context of soliciting investors, the question is “what would need to be true for you to want to invest (or partner with us on this journey, etc)?”

Multiple responses to this question are likely to deliver a positive result.