Should I Use Emergency funds or Sell my Assets ? - page 12.

coolcoinz

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Quote from: _act_ on June 27, 2023, 02:35:19 AM

Are you holding fiat? Do you not know that if you are holding fiat, it is like your government are scamming you, although it is not a scam, but it is a means to lose money as your fiat money lose value and unable to buy what you can use it to buy before.

It's actually a tax on those who hold money, especially the middle class. Rich guys have investment portfolios, hold gold. The poor spend everything they get every month, so they aren't affected that much, but the middle class, the people who have some savings, but not enough to have a stock portfolio or a number of real estate properties, have to pay the tax.

Quote from: The Sceptical Chymist on June 27, 2023, 03:02:53 AM

Yeah, what is that saying? Inflation is theft, taxation is robbery?

Inflation is just another form of taxation. Diluting the money supply makes everyone who holds it lose and makes all other assets gain value against the currency.

I'd use my emergency funds if I were you, but don't go to 0. When you're down to whatever you earn in a month, it should be a sign that you're getting into dangerous territory and better start looking for another job, or a property to sell. Maybe you have a spare room at home? Maybe you have 2 cars and could manage with 1?

Fortify

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Quote from: mvdheuvel1983 on June 27, 2023, 02:23:13 AM

I reluctantly followed the counsel of a financial advisor to fix my finances in order by creating a budget and tracking my expenses, inflow and outflow of cash using an excel sheet. The economy has been crazy in my country so I needed to do something urgently. My greatest realization after this is that inflation all round is destroying my budget. It's been five months now. I am torn between using my emergency funds or selling some of my assets to cushion the effect of this economic situation. What do you suggest I do?

Your first course of action should be identifying where you are spending beyond your means, if you are slowly chipping away at your assets. If you have a mortgage that is constantly going up due to rate rises and you cannot afford it on your salary, you need to seriously consider selling your property and downsizing - the alternative is trying to brave it out for another year in the hope of a payrise or rates coming back down. An emergency funds in intended for just that purpose, like if a big item such as a fridge or car was to break down and you need a replacement. It may be better to sell other assets but you need to rebalance your budget or it will only be a short term fix to the longer term problem.

SmartGold01

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Quote from: mvdheuvel1983 on June 27, 2023, 02:23:13 AM

I am torn between using my emergency funds or selling some of my assets to cushion the effect of this economic situation. What do you suggest I do?

If you have an emergency funds why not use them than altering your investment between where do you hold your emergency fund?
usdt, fiat or bitcoin?
As a bitcoiner it's always advisable to have an emergency fund kept safe maybe whenever your investment didn't go as planned you could used those savings or emergency fund to start sustaining on, and also try not to saving your emergency fund in fiat rather store them in usdt or usd. Just as I does, NGN kept losing in value while Dollar appreciates whenever you are converting to fiat there is every possibility to have much in fiat.

reagansimms

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Then what is the use of an emergency fund if you have to sell assets that are stored neatly in your wallet. The function of an emergency fund is to deal with economic problems that come to you, a sudden urgency can be overcome with an emergency fund.
Assets can only be sold when they reach the target you want, there is no reason to sell assets to overcome the financial problems you are facing. Take an emergency fund and save your assets, when the time is right (get profit from selling assets) it can cover the emergency funds you have spent.

demonica

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For what are you going to use the funds? If it's for something important, then you can use the emergency funds. Emergency funds are there for that purpose. But if you're quite reluctant to use that, if you think that you have other small value assets you can sell, then you can use that. But if it's something like land, properties, or something with great value over time, don't sell it.
Monitoring your budget and the inflow and outflow of your funds is great. If the inflation is affecting your budget and expenses, maybe try making changes on your budget, or sometimes others do is to find a cheaper alternatives just to fit the budget they have.

Ahli38

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Isn't what makes you collect an emergency fund to deal with things like what you are experiencing right now? So I think it's in situations like that that emergency funds are needed to be used. But I don't know what kind of situation you are currently experiencing. But if inflation is really bad there. Then avoid holding the fiat for a long period of time is the best. if you have savings in fiat. then divert your fiat into assets that are less affected by inflation. or you can invest in things that have the potential to grow your financial future.

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Quote from: mvdheuvel1983 on June 27, 2023, 02:23:13 AM

I am torn between using my emergency funds or selling some of my assets to cushion the effect of this economic situation. What do you suggest I do?

Talking about limited economic conditions is indeed a difficult position. If you face this situation, you must be very confused between holding assets to keep thinking about the long term, but on the other hand, the limited budget that you have requires a bigger injection in order to survive amid soaring inflation. Try to cut down on unnecessary purchases so you only focus on the things that really matter. So you have time to think about and manage the emergency fund. Selling some assets might also be a solution because I don't know how much it costs to live per day where you live. Whatever decision you make and think is much better for survival, then that's the answer.

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Quote from: mvdheuvel1983 on June 27, 2023, 02:23:13 AM

I reluctantly followed the counsel of a financial advisor to fix my finances in order by creating a budget and tracking my expenses, inflow and outflow of cash using an excel sheet. The economy has been crazy in my country so I needed to do something urgently. My greatest realization after this is that inflation all round is destroying my budget. It's been five months now. I am torn between using my emergency funds or selling some of my assets to cushion the effect of this economic situation. What do you suggest I do?

It is very unfortunate Snr. Member mvdheuvel1983 that you are undergoing this hard time. Emergency funds could be your living expenses for three or six months. Selling of assets will be considered after your emergency funds have started running out and you have no option. Emergency funds are not investments, they are to be spent. But if you have less than one month of emergency funds, you should start considering disposing of your assets.

Keeping emergency funds in bitcoin can be a good option because Bitcoin can be easily sold and it is a hedge against inflation. I know it has its own risk attached to it but keeping money in fiat is a disaster in my location. Inflation will make it worthless. These days bank fixed deposits are becoming obsolete especially among the youth because they prefer to keep it in cryptocurrencies.

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Quote from: mvdheuvel1983 on June 27, 2023, 02:23:13 AM

What do you suggest I do?

What is your purpose in creating an emergency fund, and why would you hesitate to use your emergency fund when you need it? I guess you're worried about what will happen if it's used up, right? That is very easy to solve, you should use it to solve immediate problems and then quickly find other sources of income to rebuild a new emergency fund. Remember that they are made for emergency use and that their use is entirely justified. Property should not be sold during this time because everything is seriously depreciating due to inflation, and should only be sold when we have no other solution.

gantez

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Quote from: mvdheuvel1983 on June 27, 2023, 02:23:13 AM

My greatest realization after this is that inflation all round is destroying my budget. It's been five months now. I am torn between using my emergency funds or selling some of my assets to cushion the effect of this economic situation. What do you suggest I do?

The simple suggestion is don't sell your assets, make use of your emergency fund. It is called emergency because of some reason and that is what it is for. Your assets depend on what it is, if land or physical properties it should appreciate high with the inflation, land is not affected by inflation depending if not in swamp area or flooding area. If you are having asset in cryptocurrency be patient for the halving next year but fiat is going to be taken out by inflation you can use it as emergency fund also for your resolving of your emergency problem. Inflation in every country and affect average people more than rich people.

TheUltraElite

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Emergency funds are those that would keep you afloat during a crisis period. Use them cautiously. On the other hand the inflation may not end so easily so you might have to do both of selling assets and using the funds. You might be a better judge of the situation yourself but talking to your local community members might do you good, after all most of us come from a similar society structure and with similar income tabs.

We can only hold it out and cope with the increasing cost of stuff. Cut down on things that you don't need, though I guess you already did some of that.

kryptqnick

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I don't want to give financial advice, so I'll just share my reasoning for what I would do in that situation. To me, emergency funds exist for an emergency, and struggling to stay within my monthly budget because of the inflation is not an emergency. So I would sell a small amount of the assets as a temporary measure, but the goal is still to ensure that the earnings cover the monthly expenses, so neither emergency funds not selling some assets would count to me as a good solution. If there isn't enough in earnings, I'd consider looking for another job or just doing something in addition to what I already do. I would also consider if there are areas where it's easy to cut spending and do that.

Iadegbola34

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Considering the impact of inflation on your budget, it might be worth considering a combination of strategies. First, re-assess your budget and see if there are any areas where you can make adjustments or cut back on expenses. Next, evaluate your assets and determine if selling some of them would provide immediate relief without jeopardizing your long-term financial goals. And finally, if the situation is urgent and you have emergency funds specifically for unexpected situations, it might be worth using them temporarily.

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Inflation only affects me when I am holding fiat in my bank account, no Fiat, no inflation problem I believe, but I understand that we are not from the same country, but why is the emergency funds for if not for periods like this?

If your emergency funds are enough to solve all these problems you are facing well I am glad that you plan to store some funds for emergencies because if not, selling your crypto assets will be the only option left right now, this is why emergency funds are important.

Only you knows what will be best for you, but I see no reason to sell your assets to battle inflation when you already have emergency funds saved somewhere, if you sell your asset to fix the problem, where is money going to come from in the future?

Tony116

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Quote from: _act_ on June 27, 2023, 02:35:19 AM

Are you holding fiat? Do you not know that if you are holding fiat, it is like your government are scamming you, although it is not a scam, but it is a means to lose money as your fiat money lose value and unable to buy what you can use it to buy before.

Likely you have your emergency money in your local fiat too. You said emergency, which means it should be used for inconveniences time and for emergencies. You supposed to use your emergency money, not that you should sell you property that may increase in value, although I am just saying that because some properties like land, metals, jewelries and many others like that can increase in value.

It is better not to hold money in your local currency, bitcoin is still not that high, you can buy it instead. Ones the price is high very well and you have gained, you can convert some to dollar or other good foreign currency which are better than many fiat from countries like Venezuela, Lebanon, Sudan, Argentina, Zimbabwe, Turkey and many other countries.

If he's not from high inflation countries like Venezuela, Türkiye... the emergency fund is fiat, what's wrong? You need to differentiate between an emergency fund and an investment fund, what happens when you have an emergency fund in bitcoin and when it is at $69k, and now you need to use them? Bitcoin is not suitable for use as an emergency fund because of its volatility, I recommend using local currency or USD as savings, not bitcoin.

OP, this is considered an emergency for you, and it is perfectly appropriate to use an emergency fund instead of selling another asset.

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Quote from: mvdheuvel1983 on June 27, 2023, 02:23:13 AM

[....]I am torn between using my emergency funds or selling some of my assets to cushion the effect of this economic situation.

You may use emergency funds now but what's going to happen next? The inflation in your country is probably not going to slow down and you'll still face the same problem so how about finding ways to increase the source of your cash inflow? You can sell some of your assets if you have the intention to roll it over. You can also have extra jobs that would only take 2-3 hours.

Zaguru12

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Quote from: Solosanz on June 27, 2023, 04:17:08 AM

However I prefer to not have any emergency funds and just invest all to few commodities, if someday I need money ASAP, I can just sell my Bitcoin and withdraw it from bank ATM.

It is actually preferable to invest emergency funds in assets that have stores of value so that inflation doesn’t affect their value. But I would advice him to invest everything into bitcoin Atleast he needs to hold some assets or fiat time to time. Because if at every moment of emergency you turn towards the assets like bitcoin which is volatile then due to the situation of emergency you might be selling at a way lower price than it should be. Imagine having bought bitcoin at $30k and when emergency arises the price then is below $20k then you might be selling way too low. But with other assets at hand you can actually sell those that aren’t going to cause loss. So in all honesty even if we want all our funds in bitcoin just to get away from devaluation we need to hold some fiat too but certainly not for way too long

Issa56

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Quote from: mvdheuvel1983 on June 27, 2023, 02:23:13 AM

I reluctantly followed the counsel of a financial advisor to fix my finances in order by creating a budget and tracking my expenses, inflow and outflow of cash using an excel sheet. The economy has been crazy in my country so I needed to do something urgently. My greatest realization after this is that inflation all round is destroying my budget. It's been five months now. I am torn between using my emergency funds or selling some of my assets to cushion the effect of this economic situation. What do you suggest I do?

You just said you are having emergency fun, then why do you have to sell your assets when you are having emergency fund. If you can sell your assets then your emergency fund is not serving its purpose. Since you are having emergency funds then i will recommend you make use of it, that's why its called emergency fund, you finished your emergency fund and you haven't balanced yet then you can start selling your assets to sustain yourself. It wont make sense that you are having emergency funds but you are not touching it when you are financially down, the purpose of emergency fund is for you to have something to fall back to when you are financially down.

vv181

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What your advisor suggests is a good first step to collect and analyze your financial situation. Unfortunately, with the limited information you provide, such as, how your current exact cash flow looks like, the inflation rate, what your current urgent needs are, how many emergency funds you have, and what kind of assets, is hard to be carefully considered. Incomplete information might give someone bad advice.

One suggestion that I have for you is to contact again your former advisor, either asking for suggestions or consulting your current condition. It seems the only safe option, considering you have something to do urgently, unless you might want to give further information, but it could also potentially reduce your privacy.

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Quote from: mvdheuvel1983 on June 27, 2023, 02:23:13 AM

I reluctantly followed the counsel of a financial advisor to fix my finances in order by creating a budget and tracking my expenses, inflow and outflow of cash using an excel sheet. The economy has been crazy in my country so I needed to do something urgently. My greatest realization after this is that inflation all round is destroying my budget. It's been five months now. I am torn between using my emergency funds or selling some of my assets to cushion the effect of this economic situation. What do you suggest I do?

Don't you have cash flow like coming from active and passive income and you can just opt to keep all of it? But I guess you're in a very dire situation and you've got no option so you're opting to choose any of it. I think if you're in this situation and your assets have grown over time, it's best time for you to benefit from it and that's your choice to make. By the way, what's the purpose of you're in need of money? Is it that you're gonna need to spend a huge amount or you just want to have something in your hand for spending purposes like your daily stuff and monthly obligations? We need more info about that because if it's all about the economic situation deteriorating, you know what's best for yourself because you're the one in need and experiencing it and you know better based on the situation that you're dealing with.

Topic: Should I Use Emergency funds or Sell my Assets ? - page 12. (Read 1468 times)