Get A Buffer Fund

Do you have a buffer fund? Some call it a rainy day or contingency fund.

Having lots of cash sat around is not sensible from a long term investing perspective, but having a cash buffer fund DOES make sense.

The idea is to have enough cash to cover most unforeseeable events so that you aren't forced to dip into investment accounts. Murphy's law tells us that when you most need cash is the precise time when the stock or property market has crashed!

Therefore look to have 3-6 months of living expenses put aside. Anything above this should be invested with the expectation that you won't touch it for 5,10,15+ years.

If you don't have that much currently then look to build it up over the next 12 months.