Investment and Emergencies come at a price ooo.
As I have been given permission to share, I thought it a good time to let you know the relationship between emergencies and investment.
There is this client who had a one-on-one Invest for Wealth Action Plan Consultation with me sometime last year, and she was FIXATED on investment which is ‘technically’ great but she did not want to address anything else concerning her money.
She did not want to address budgeting or planning, or emergencies or anything! She only wanted to know what to invest in and get double her capital (as per money doubler starves!)
I explained to her the implication of building a house with a poor foundation, the result in time could be less than pleasant.
You see, you can get carried away with investing and getting returns but what happened to this client soon after is, she had an emergency.
The problem with an emergency is, it does NOT tell you when it is coming! It’s like being pregnant, you know you are going to deliver but you cannot be sure the actual day and hour your water will break.
If that is a little too graphic, I apologize! But I want to make this as real for you as possible.
Your car, (if it is anything like mine) also rarely ‘informs’ you of the day and hour it will decide to develop a ‘fault’. It could be 3rd Mainland bridge, it could be on your way to your sister’s wedding, on your way to ‘villa’, literally ANYWHERE!
And when you do not have the funds for an emergency, what happens?
- You borrow the money. Sometimes with interest, (payday loan somebody?) because you are desperate to fix the problem at ANY COST!
- You break your investments, even if it comes with penalties for not waiting for the full term as agreed, you sometimes lose some of the value and it can be so and that you join the band wagon of ‘distress sale’.
So to avoid this, we had pre-determined on some steps she should take to avoid such an incident. But she did not do it and she called later to tell me option 2 above happened. An emergency forced her to prematurely liquidate(sell-off) her investment. She had learned her lesson and realized the importance of the ‘other’ aspects of money that she did not want to address earlier.
This is not something we desire to happen but it is something we should prepare for, so we do not find ourselves in an unpleasant tight spot.
Have you ever had to break your investment because of an emergency?
Tolu Dima-Okojie