Emergency Fund vs. Unit Trust Investments: Where Should Your Money Go First?

You’re excited to start growing your wealth through unit trust investments—but before you dive in, there’s one crucial step you must take: building an emergency fund.

Why? Because even the best unit trust funds are designed for long-term growth, not immediate cash needs. A sudden job loss, medical emergency, or urgent repair could force you to withdraw your investments at the wrong time—possibly at a loss.

Emergency Fund First: Protect Your Unit Trust Investments

An emergency fund is your financial safety net, ensuring you don’t have to cash out your unit trust holdings in a crisis.

How Much Should You Save?

• 3–6 months’ worth of living expenses is ideal.

• Start with a small goal (e.g., 1 month’s expenses) and build from there.

• Keep this money in a high-yield savings account or money market fund—safe, liquid, and separate from your investments.

Unit Trust Investments: Grow Wealth After Securing Your Safety Net

Once your emergency fund is in place, unit trust funds become a powerful tool for long-term wealth-building. Here’s why:

 The Smart Investor’s Strategy

1  Step 1: Build your emergency fund (3–6 months of expenses).
2  Step 2: Pay off high-interest debt (credit cards, personal loans).
3  Step 3: Start investing in unit trust funds consistently (e.g., equity, balanced, or fixed-income funds based on your risk profile).

 Pro Tip: Many unit trust platforms allow systematic investment plans (SIPs), so you can invest small amounts regularly—even after securing your emergency fund.

 Your Turn: Do you have an emergency fund, or are you investing in unit trusts already? Share your strategy below!

 Tag a friend who needs to see this!


   SK Lim
   Your Wealth Planner