Emergency Fund The First Step to Wealth

http://otiscollier.myecon.net/opportunity-presentation.php
Emergency Fund The First Step to Wealth
Hello, this is June Collier your Corporate Network Marketer and today I would like to chat with you about saving up for a emergency fund. This is actually the first step to creating wealth.

I have studied many experts on the subject of personal finances to include my two favorites, the late Larry Burkett and Dave Ramsey. They all advise that the first step to financial freedom is to start an emergency fund. Dave Ramsey recommends $1000 unless you earn less than $20,000 a year at which he recommends $500.

My mentor, Mr. Ivey Stokes, advises that you really should have $5000 set aside as an emergency fund in today’s economy. Mr. Stokes is the founder of a personal financial literacy company called myEcon.

Most people place their emergency fund in a bank savings account which is a cash equivalent type of investment. Cash equivalents are low risk low return investments that have high liquidity. This simply means your chances of losing your money is very slim, yet you will also not earn much in return as a investment. The liquidity simply means you can easily convert your investment into cash and do so quickly.

Before we go into any further details about where to place your emergency fund, I want to take a quick moment to talk about the purchasing power of the dollar.

The US dollar has historically dropped in value over time due to inflation. Inflation has averaged 3% for many years. As you will see in this diagram, a $1.00 in 1913 would have the purchasing power of a nickle in 2013.

A better way of understanding is this, what costs a dollar today, would have cost 5 cents in 1913. So in order to maintain it’s value, that 1913 dollar would have had to grow to $20 to maintain the same purchasing power.

Now what does this have to do with your emergency fund or any amount of money that you are saving and hoping to grow for the future?

You should understand that inflation is working against you and if you are not at least earning the amount of inflation on your money, then you are losing money! Don’t be tricked into thinking that because you put $1000 in the bank and 12 months later you have $1001.20 cents that you made money. At 3% inflation, you would need $1030 to have the same purchasing power as you did the year prior!

So if we go back to the savings rate of .01%, that means your $1000 sitting in that savings account will have earned $1.20 while inflation would have risen by $30. You are $28.80 short.

Call/Text: 678-837-5863
Email: june@junecollier.com

Join/Learn More: http://otiscollier.myecon.net/opportunity-presentation.php
June Collier
Corporate Network Marketer
678-837-JUNE (5863)
Call me... I answer!
http://www.junecollier.com/resources

Видео Emergency Fund The First Step to Wealth канала June Collier