If you have discretionary income, then you should never wait for an emergency fund. As you said, the emergency fund is set aside before the discretionary income. If you have created an emergency fund without really investing, then this is the wrong approach. Because if you do not already have an emergency fund, then you can create an emergency fund along with investments. If you create an emergency fund along with investments, then you are not missing out on the opportunity to buy, you are not falling behind the goal of building your portfolio. If you wait to create an emergency fund without investing, then this will be a very wrong decision for your investment.
You may be confused, discretionary income is the amount of money that we do not need very much. For example, even if this amount of money is lost, we will not suffer much loss. The amount of money that is left after deducting all your expenses is the discretionary income. If you invest with discretionary income, you do not need this amount of money very much. Discretionary income is very good for long-term investment.
If a guy is building up his emergency fund, then he is taking that money from the discretionary fund. It is money that is after the expenses have already been determined and/or removed... so yeah, all back up funds, whether emergency funds or reserve funds are built from discretionary funds.
Sir, I got the right information from you. I was very confused about this issue. Because I have seen many people creating an emergency fund with their main income and many people creating an emergency fund with discretionary income. Whenever I tried to ask someone, everyone gave different advice, due to which I was very confused about this issue.
If a person creates an emergency fund with discretionary income, then it will be very good for them in creating an emergency fund. Because they will not have any kind of exclusion in creating an emergency fund. If a person invests with his main income, then sometimes there may be a financial crisis for family expenses or all the other expenses, due to which the continuity of creating an emergency fund may be lost. So whether it is our emergency fund or any other fund, it is better for us to create it with discretionary income.