Invest between three and six months' living expenses in an interest-bearing money market fund. This becomes the emergency fund and, in effect, your own bank. When this fund has been reduced it should be replenished before other investments are made. Save in an interest bearing account for major purchases. This is a planned purchase such as automobiles, furniture and even the down payment on a home.
Most investments require a reasonable time period to perform.
Invest to meet long-term goals. If you are like most people, everything you have or hope to have for yourself and your family requires that you continue to earn an income. Your ability to earn an income is the foundation that supports your expenses, your lifestyle and your future plans. This chart illustrates how quickly your financial picture can change if a disability strikes. All you have been able to save in ten years may be wiped out in ten days.