Start investing as soon as you have more than your emergency funds

Cost of living all over the world has been increasing over the past few years. The usual way of living where the only source of income is from our jobs and we save the rest after essential spendings, does not work anymore. With this rate we might not be able to enjoy life as much as we would want to. We might be stuck living paycheque to paycheque. Which is completely fine. But not fine for everyone. At this rate, we, millennials, might not even be able to own a home, let alone have the freedom to leave a toxic workplace/ pamper oneself.

I hope to get out of the rat race.

So this is what I believe should be done for those who share my sentiments.

Emergency Funds

As you are earning, save as much as possible and set aside money for emergency. What that means is calculate your spendings for each month (average), multiple by 6 (months) that is how much money you should save for emergency. Emergency situations like retrenchments, accidents etc.

Example: I spend on average $1500 every month. So my emergency funds should be $1500 * 6 = $9000 at any point.

Once we have accumulated enough emergency funds, we should start making the extra money work for itself.