Investment expert Juan Vidal has said workers should build up an emergency fund covering three to six months of living costs before putting any money into investments, illustrating the point with someone who spends 1,800 euros a month.
Vidal, who describes himself as a long-term investor, said September is a good moment to review household finances. He said the first thing to check is not how much a person earns, but how much is left over at the end of the month and where it goes.
According to Vidal, there are three conditions to meet before entering the market: knowing income and expenses in detail, clearing expensive debt, and building an emergency fund. He drew a distinction between manageable liabilities, such as a low-interest mortgage, and harmful consumer loans. A card charging high interest, he said, takes away more each year than a person would reasonably earn by investing.
The central pillar of this preliminary strategy, Vidal said, is securing liquidity equal to three to six months of ordinary expenses, calculated on spending rather than gross income. He gave the example of someone who spends 1,800 euros a month, saying that person should have between 5,400 and 10,800 euros available in savings, enough to cover three to six months of their usual costs.
If a person spends 1,800 euros a month, that means having between 5,400 and 10,800 euros available and saved. Juan Vidal
Vidal said the aim of this cushion is not only financial stability but also peace of mind, to avoid selling investments in a hurry when a household emergency or job loss occurs.
Consistency over market noise
Once that financial backing is in place, Vidal said the starting amount matters less than discipline. Investors can begin with 100 or 200 euros a month, he said, because the amount matters less than consistency. He recommended automating the monthly contribution on payday, so that systematic saving happens before everyday spending, adding that no amount of money can make up for years that have already passed, since time is a person's main financial asset.
Vidal also warned against chasing quick returns by constantly checking share prices on a phone. Instead, he said investors should think of buying shares as owning a fraction of a real business. He said the goal is not to get it right this quarter, but to build a growing income that lasts forever, pointing to how companies perform over time rather than short-term volatility.
Protecting savings from inflation
This cautious, staged approach matches the view of Jose Manuel Garcia Rolan, founder of Consul Capital Gestores XXI and recognised as Spain's best financial adviser in 2018. He said idle money loses value as inflation rises.
Garcia Rolan said it is now possible to invest from as little as 50 to 100 euros a month through investment funds or pension plans, which he described as a necessity given the demographic pressure on Spain's public pension system. He agreed with Vidal that savers should first set aside three to six months of fixed expenses in a current account or another low-risk product before investing the rest.
A study by the platform Lightyear found that 61% of investors are looking to grow their wealth, 41% are saving for retirement, 20.1% are protecting themselves against rising prices, and 15.8% are planning to buy a home. Alvaro Quesada, a director at the firm, said users are choosing to build a strategy aligned with financial stability.
Ways to build up savings first
For people who find it harder to hold on to capital before investing, there are progressive methods designed to build up liquidity. One well known example is the 100 envelopes challenge, promoted by Richard Gracia, which allows savers to gather up to 5,000 euros in 100 days through numbered daily contributions that can be scaled to fit each household's budget.
Vidal and other analysts in the sector agree that the priority is to establish the safety cushion first, and only then to keep up regular investment without changing course over the long term.
