I've been saving money and I think I have enough to begin investing. Should I open an investment account and transfer all of my savings?
Answers | 3
Congratulations on saving enough to begin investing! You are on the right track.
You probably shouldn't transfer all your savings. Keep some back as an emergency fund for large unexpected expenses or in case you lose your source of income. Investing is a long term process and will provide you with better results if you can be consistent and steady. Having to tap your investments to pay for a major car repair for instance, will disrupt your investment plan.
A good rule of thumb is to keep 3 to 6 months of expenses in a savings account for emergencies.
Barry Bailey CFP
I would definitely do what Barry said regarding keeping some cash back ( I would encourage you to keep not just expenses but 3 to 6 months of income) but I would also speak to a qualified financial adviser who can help you navigate your short term and long term goals to determine if what you decide to invest in will help you reach those. If you don't have any current goals (which I doubt since you've been diligent enough to save for investing), you should think about formulating some based on your desires for future income, retirement income, plans for travel or home-buying, etc. as all of those desires should shape where you put your money and the diversification of your investments. All in all, make sure that what you're earning in an account will outpace inflation so you're not going backwards. Let me know if I can help further.