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The 12th Man: Why Emergency Funds Are an Absolute Must Have

Written by: Team Angel OneUpdated on: Mar 25, 2025, 9:37 AM IST
Your emergency fund is the 12th man—rarely noticed but crucial in crises. With SGBs for stability and liquid funds for speed, be ready for life’s googlies!
The 12th Man: Why Emergency Funds Are an Absolute Must Have
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When cricket fever is at its peak, we seldom think of the 12th man. For instance, did you know who the 12th man was in the final match of IPL last year?

Exactly.

But the 12th man is a very important part of the team, even though we don’t think about him. Why? Because when a player is unexpectedly injured on the field, it is the 12th man who makes the team complete.

Emergency funds are that indispensable backup in your financial lineup. They stand by your side during the unpredictable overs of life, ensuring that a sudden setback doesn’t collapse your entire game plan.

When the 12th Man Steps Onto the Field

Every cricket team knows the value of having a reliable 12th man. Though they might not always be in the spotlight, their readiness to step in during critical moments can be the difference between victory and defeat.

Similarly, an emergency fund is not about high returns or flashy gains; it’s about stability and protection. It’s your cushion—a reserve that protects you from life’s unexpected googlies, be it a medical emergency, an urgent repair, or a sudden loss of income.

Fielding a Strong Defence: Securing the Family Portfolio 

When planning your financial strategy, think of your emergency fund as the cornerstone of your family portfolio.

Just as a balanced cricket side combines power hitters with dependable defenders, a robust family portfolio isn’t complete without a healthy emergency reserve.

The objective of this portfolio isn’t wealth creation. It’s the shield that protects your loved ones from unexpected turns during the match.

By setting aside a portion of your resources, you’re ensuring that your family remains secure, even when the match takes an unforeseen turn.

Boundary Protection: A Golden Shield in Tough Times

Consider a batsman who unleashes a perfectly timed hook shot to ease the pressure of a tense moment.

That’s the impact of having a solid defence. In the ever-changing pitch of the financial market, stability can be hard to come by.

For such moments, Sovereign Gold Bonds (SGBs) are a reliable asset that serves as your golden shield during volatile times.

SGBs blend the intrinsic value of gold with the security of government backing, much like a game-changing boundary that shifts the momentum.

They not only act as a safeguard against market turbulence but also hedge against inflation, ensuring that your defensive play remains robust when the going gets tough – in other words, SGBs are a perfect instrument to hedge the market risk of your equity portfolio.

Liquid Funds: Your Quick-Response Unit

Picture a bowler who suddenly changes his pace and line, catching the batsman completely off guard—it’s that split-second adjustment that can turn the game around.

Emergencies on the financial pitch demand that same nimbleness and agility. Liquid funds are designed to be readily accessible – i.e., you can sell the underlying instruments within seconds and redeem your money quickly.

They work like your team’s quickest player, always alert and ready to jump into action at a moment’s notice. Because emergencies come unannounced, your emergency portfolio needs the same kind of agility.

In the world of finance, every second counts, and liquid funds ensure that you’re never caught off guard when the unexpected happens.

Captain’s Call: Bringing It Together

In cricket, the captain’s savvy decisions like strategic field placements and timely substitutions often decide the outcome of a tight game.

In your financial innings, success lies in integrating a mix of protective strategies. Your emergency fund strategy should mirror this tactical blend: a family portfolio fortified by steady assets like SGBs and agile, readily available liquid funds.

When these elements work together, they create a diversified financial lineup capable of handling any curveball. Now, that’s how you secure not just the match, but the entire tournament!

Practice Makes Perfect: Discipline and Consistency Counts

Every great batsman knows that consistent practice is the secret to mastering the game.

Building a robust emergency fund is no different—it demands discipline and regular contributions. Each deposit is no different from a training session that refines your technique and strengthens your financial muscles.

Keep your eye on the ball! With every small, steady contribution to your liquid funds or purchase of SGBs, you’re building a financial fortress that can weather even the most unexpected challenges.

It’s the cumulative effect of these deliberate, ongoing efforts that transforms your financial strategy into a championship-winning plan.

Post-match Huddle: Celebrating Your Financial Readiness

As the players gather in the dressing room after a thrilling game, they share not just their victories but the lessons learned and the strength of their teamwork.

In the same way, building a robust emergency fund is about more than just safeguarding against setbacks—it’s a testament to your strategic planning and financial discipline.

With a well-diversified family portfolio that includes the reliable shield of SGBs and the agility of liquid funds, you’re not merely weathering the storm; you’re setting the stage for future triumphs.

Embrace this post-match huddle as a celebration of your preparedness, knowing that your 12th man is always on standby to back you up when life throws its unexpected challenges your way.

Disclaimer: This blog has been written exclusively for educational purposes. http://bit.ly/usSGoH

Published on: Mar 25, 2025, 9:37 AM IST

Team Angel One

Team Angel One is a group of experienced financial writers that deliver insightful articles on the stock market, IPO, economy, personal finance, commodities and related categories.

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