If you are one of the fortunate individuals to have income from your investments that you can rely on every month, then you are to be commended. It is nice to have that bit of extra money coming in so that you can plan for life’s unexpected occurrences. At the same time, investments are not immune to risk. Even the most diversified portfolios can suffer from a downturn. In that case, you will need to find a way to weather the storm and endure the low returns that your investments are generating for a season or two.
Take a Look at Your Cash on Hand
Depending on the length of time that the investment income you were counting on takes a hit, you might have enough cash on hand to make up the difference. The key is to not put all of your eggs into one basket. You could find that cutting out a few discretionary expenses in the interim might help you get through unscathed. At the same time, you do not want to deplete all of the cash that you have, as that will just make the next storm even more difficult to navigate through.
Fund an Emergency Savings Account
This is a good time to evaluate the need for an emergency savings account. You may not have started to fund that yet, but you have been hearing that you should have six to nine months of living expenses stored away for a rainy day. That is good advice. When your investment income takes a hit, you could rely on that fund to help get you through. The key is to make a pledge that you will replenish the fund as soon as your investments turn around. By the same token, not everyone is able to save up the money required for an emergency fund. If that is your situation, then there are some options available to you.
Consider a Short-Term Loan
If you have already depleted your savings account reserves, there are a few other things that you might want to consider if faced with expenses from an unexpected emergency. One of those involves applying for an online payday advance to get the funds you need to cover the sudden unexpected expense and help you get over the hurdle. Before you do that, you can check with family and friends to see if they are able to help you out in a pinch. Alternatively, you might qualify for a home equity loan.
Assess Your Future Needs
If you are depending on your investment income for some of your future needs, then this would be a good time to take a look at those. It is important to diversify your portfolio and plan for expenses that will be coming at some point in the future. This might include such items as a new house, college tuition for the children, and reliable transportation. Make allowances for these items so that the money is there when you need it.
Take a Look at Your Current Investments
If your investment income is really taking a hit, then it is time to actually take a look at where your money is going. It might be that you need to reallocate some of your investments in order to be better prepared for the low returns that come from time to time. Speaking to a financial advisor about this could be the way to go.
These are five areas that you will want to take a look at sooner as opposed to later. It is important to develop a comprehensive financial plan in order to help you weather any storm that may come your way. While your investments may be generating a nice income for you today, the day will eventually come when you need to find money elsewhere. No matter if that comes from your savings or a short-term loan, having a plan in place will get you prepared and ready to take positive action.
