Don't Break Investments for Emergencies: It Costs More Than You Think

• Using long-term investments for short-term emergencies can severely impact wealth due to poor timing and missed market recoveries.
• Selling investments during market downturns, like the 14% fall between October 2024 and February 2025, prevents benefiting from subsequent rebounds.
• Withdrawing funds interrupts the power of compounding; a 40,000 rupees monthly investment at 10% could grow from 80 lakh in 10 years to 1.6 crore in 15 years, but withdrawals halt this.
• An emergency fund, ideally 6 months' expenses (e.g., 6-9 lakh rupees for 1 lakh/month spending), protects long-term investments.
• Keep emergency funds in accessible, safe options like savings accounts, fixed deposits, or liquid mutual funds, prioritizing safety over high returns.

Why It Matters: Protect long-term wealth by building a dedicated emergency fund instead of breaking investments for crises.