Peace Of Mind and Emergency Funds

I've come across this question several times as the amount of cash I've indicated seems relatively low in comparison with my invested capital. 

'Do I have an Emergency Funds available?'
The answer is, Yes. I do. 

I've also indicated this at the bottom of my page on 'Portfolio':

Portfolio you see here does not include emergency funds, CPF funds or any other form of money required for daily expenses. Funds/equities here are purely my investment portfolio which I've established when I'm 19 years old back in 2017. Also, should the market evaporate completely, I will not starve because of what that is here. 


The keyword is 'starve because of what that is here'

It's definitely not pleasant to go through this sticky situation twice after 2016.

Read: Polytechnic Student with $3.63 as Net Worth - 1 Year Later

If you are going to starve because of your investment in big financial events such as GFC or losing sleep because the counter you've bought is going south, it's very likely that you are overly-invested in the market. 

While I will not talk about how good/bad having an investment is. Neither will I talk about the need to have one. The most important thing is to have a peace of mind, regardless of what you do. 

Personally, I feel that the emergency funds provides me with a safe level of comfort, which gives me a peace of mind when being invested. This has allowed me to sleep easier at night too. 


One can definitely argue about the need to have an emergency fund available to you when credit cards and several options are readily available. Or even certain that you have no kids, no liability, still studying.. Why do you need it?

Remember the word there? Emergency Funds.
This means that this sum here is supposed to help you when there is an emergency. This emergency could be a sudden loss of income, illness or anything that demands an unexpected amount of expenses from you. 

As a student, having emergency funds suggests to me that even if I do not work and my invested capital fully evaporates, I will not need to ask for dollars from my family even when my expenses account depletes totally. 

I don't enjoy asking for dollars from my family and it had been a really long time since I last done so. 

At least for 6 years, if I did not remember wrongly. 

Yes, it applies to even when I have $3.63 as my net worth. 
Fortunately enough, I had been working a little and my pay came in the very next day. 

This taught me a very serious lesson. 

Having this emergency funds available, it prevents me from starving and offers me a peace of mind.  

At least for the duration that my emergency funds are able to sustain me and that I do not have income due to any reasons, I'm not having a big headache as someone who doesn't have one!




So, instead, ask yourself:
1. How much is your overall monthly expenses? (This includes mortgage, food, bills etc.)
2. What is your age and how 'long' of emergency funds will you need?
3. Most importantly, with that amount, will you be able to sleep in peace when you loses your income and investment evaporates completely? 
4. No? Increase the amount by a fold.
5. Still no? Increase it by another fold. Repeat until you can sleep peacefully. 
6. If you still couldn't sleep peacefully, it's time for you to reduce on your un-neccessary commitments. 

Remember.. peace of mind is priceless.

It's important to be able to sleep in peace. 

You may also subscribe to receive my latest email updates here. 

Read: Peace of Mind and Emergency Funds. Really?

DBS Multi-Currency Account

From the previous post about my Japan internship opportunity.

I've since started with the planning, budgeting for this trip and has also been working even more often to save up for the trip. As I will be there for a prolonged period, I will need to have a better plan and management over my resources when I'm there.

Apart from your travel documents and clothing, one important thing to bring along is definitely cash.

As I will be there for approximately 3 months, it will not be exactly feasible for me to bring a big sum of money over for my living expenses. In any event whereby I drop the money along the way or any accidents occur, I'll be having a headache there. As such, I have been looking through the net about the other alternatives over bringing a big sum of living expenses there, which brings me to DBS Multi-Currency Account.

Using the DBS eMCA account, we'll be able to buy foreign currencies at our preferred rates. However do take note that if you're buying directly from the bank, you'll be subjected to the spreads.
Buying of foreign currency can be done through iBanking

Steps to buying your foreign currency online via iBanking:
1. Login to iBanking, select the tab on 'Transfer'
2. Under the transfer tab, select 'To my account'
3. From : DBS eMCA account, Currency: SGD (the currency here refers to the currency you'll be using to purchase your foreign currency)
4. To: DBS eMCA account, right below, select the currency you would want to buy.
5. Under transfer currency: select the currency you're using to purchase your foreign currency
6. Key in the amount you'll like to buy
7. Select on whether you want to transfer it immediately

If you happen to have the foreign currency you want on hand or you've changed it at any money changer outside, you're also able to deposit/withdraw the cash from your DBS eMCA account through their branches, with a fee of S$10 per deposits/withdrawal.

I personally will feel that the money changer outside provides a better rate. The best rates can be found through here. After which, go to any branches to deposit your foreign currency into your DBS eMCA account.  Ensure that the spread is not going be a big percentage to what you're going to deposit. Subsequently, you'll be able to withdraw/spend from the country you're visiting without any worries. In any event whereby you do not have sufficient funds in your foreign currency wallet, you're able to transfer it from your bank account over to the MCA account and purchase your foreign currency.

However, to save on the fuss, you could just buy the currency online and make your withdrawal there when you need it. The spread is about 1.2%. 


The currency you've bought will be deposited into the various currencies wallet.
Eg. Japanese Yen wallet for deposits/withdrawal of JPY.

Withdrawal can be made in Japan from any ATM with the Plus sign. The amount you've withdrawn will then be directly deducted from your Japanese Yen wallet.
The ATM withdrawal fees for each withdrawal is 350Yen (about S$4.36) in Japan.

Using the DBS Visa debit card, you're also able to make purchases there by which the amount will also be directly debited from the respective currency wallets.  

This is cheaper than the usual charges imposed by Master/Visa (2.5%) when you carry out cross-borders transaction.


Therefore, I feel that for frequent travelers or anyone that is visiting a certain country for a prolonged period or even anyone who is feels unsafe to carry a thick stack of cash everywhere you go, this account should be of a good help.

The account can also be created in minutes if you're an existing POSB/DBS member via iBanking

 

I've just tried out the account by "buying" 10,000 Yen at S$125.53.

Current rate of Yen to SGD @ 100 : 1.242
Therefore, I've "paid" S$1.33 (about 1.07%) to try it out:)




Their Foreign Currencies rate can be seen here.
More information about the DBS Multi-Currency Account can be found here.

This is not a sponsored post.