I need some advice on investment and saving up on my war chest. Am I investing too much? Should I have a war chest in case market crash? - Seedly
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Asked 2w ago

I need some advice on investment and saving up on my war chest. Am I investing too much? Should I have a war chest in case market crash?

I am 26M, fresh grad, started working for 4 months, earning 8.5k a month. I have about $120k in total but I invested $50k within 6 months. My friends are saying that I invest too much. Literally, 70% of my current salary goes to investment and 20% for my parents and spend the rest. I don't save monthly as I have $50k as my emergency fund.

I am not sure if I am doing it right.


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Hi Anon,

First of all, I feel warchest is for some people who are timing the market. As much as people would like to describe it as opportunity money, but mostly are speculating and hoping the crash happens if not their warchest is decreasing in value due to inflation. So just make sure you don't belong to the some people!

It's good that you have sorted out your emergency fund and drawing such an outstanding salary at a young age. With that being said, you should continue invest money that you do not need, lest for a short period of time. Just make sure you allocate your resources properly and have a adequate diversified portfolio. If the market really crash, it's still okay to do top up if you have any spare cash even though it may not be a huge sum. Time is on your side, recovery is going to happen as long as you are investing in fundamentally good investment. Just don't speculate.

You do not have to care much about what your friends said because everyone has different risk tolerance and views on the stock market. As long as you know what you are doing, you are always ahead in terms of planning and mentality.

You are doing great, all the best!​​​


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I do not save monthly as well. I invest 80% of my cashflow every month. The percentage heads up as your income grows if your expenses does not grow in tandem with your income.

I set aside my emergency funds and invest heavily through my cashflow plans just like you.

A war chest is required if you foresee that your expenses of 6 months will exceed your 50k emergency fund.

And if you foresee upcoming liquidity events like a home purchase, marriage, and such, it will come down to the strategy of your investments in protecting your capital.​​​


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Level 7. Grand Master
Answered 2w ago

You are very satki. i old uncle graduated 20 years ago until now also don't have half your salary.

anyway to answer your question, by saying "market crash" means you want to monitor the market. if you have the passion, time, and guts to do so, then you should. there was an article somewhere shared here which says lump sum investing beats dollar cost averaging.

but for people like me who can't be bothered with the news and such, I just put in a fixed sum regularly.

whether you are investing too much or not, is a question for yourself. your friends might not know your situation. what are you investing for, what is your time line, what is your desired amount. my investment coach taught me this, if you need a million (for whatever reasons), and you already have a million, then there is no need to be greedy and take market risk.

hope this helps.


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