Working as an investor is generally all about going long. However, even the most committed investors experience short-term cash deficits due to unexpected bills, market fluctuations, and other similar issues. Closing these gaps intelligently is crucial to keeping your finances in balance while protecting your long-term investment strategy. Let’s look at how intelligent investors can close these gaps without compromising their portfolios.
Use Payday Loans Responsibly in a Pinch
Payday loans are designed to be convenient and quick, frequently depositing cash in minutes of approval and minimal paperwork. They can help in situations when you need money fast, but you must find the right lender first. Going with services, like My Canada Payday makes a lot of sense because they provide a hassle-free, all-online experience; applications take only a few minutes and money can be transferred through Interac e-Transfer 24/7, making them a quick option when time is of the essence.
Bear in mind that you need to be careful with payday loans. They’ll get you the money fast and don’t mind that your credit rating is not so good, but they have a high interest rate and are to be repaid on your next payday. For investors, it’s always better to use payday loans for real emergencies, such as when needed to pay for essential things while waiting for a dividend or the proceeds of stock sales.
Build and Use an Emergency Fund
One of the best methods for investors to handle short-term cash crises is to have a solid emergency fund in place. An emergency fund is a cushion and allows you to pay for unexpected expenses like medical bills, home repairs, or in case you lose your job temporarily. You can also do that without having to dip into your investments.
Ideally, you should stash three to six month’s worth of living expenses in an easily accessible account, like a savings account, money market fund, or some short-term CDs (certificates of deposit). If you’re investing, it’s important to have your emergency money and your investment money in separate buckets.
While your investments are all about growing them over time, your emergency fund needs to be solid and accessible when you need it. Having them separate means you won’t be forced to sell shares or other stuff when the market’s being crazy, which might lock in losses and destroy your long-term financial plans.
Use Side Hustles and Flexible Income Streams
One powerful way of solving short-term cash problems is to have diversified income sources beyond your primary source of funds or investment returns. Part-time work such as freelancing, consulting, or gig economy jobs may be a lifesaver when you witness unexpected expenses or when investment returns are low for a brief period.
You must select side jobs or part-time employment that fit what you’re good at, what you like, and when you can really do it. That way, they will complement, not hinder your investing. Like, writing or a short-term consulting gig can bring in some extra money without requiring a huge initial investment. You can then use that money to add to your emergency fund, pay off debt, or jump on new investment opportunities when they come along.
Endnote
Learning how to deal with short-term cash problems is important for any investor. You can tap into a payday loan if you’re totally in a squeeze, rely on a good emergency savings fund, or take on some side jobs to bring in some extra money. Whatever you do, the goal is the same: preserve your long-term investment strategy while covering whatever life imposes on you. If you think ahead and use these tactics wisely, you can plug any gap without sacrificing your future growth.
