All:
I have currently no contingency fund. I only have about 8 lacs in stock market (stocks, mf and debt) of which around 5 or 6 lacs is not locked in. Rest is in tax saving funds.
I’m 32 years old and have decided it’s high time to start a contingency fund.
So my question is:
1) Can I invest monthly say 5K or something in Liquid funds as contingency fund? Is this better than say FD? I can also increase this amount whenever I get some bonus or lumpsum etc. So, please do not calculate that 5K is very little
2) Which option should I go in for? Growth or Dividend reinvestment?
Please note that I already am prepared to sell my existing stocks/mf at whatever loss or gain in case an emergency occurs in the short term (2 to 3 years)
Can members please advise
Thanks,
Ram