Page 12 - Introduction To Investment Management

that you can generate a large cash reserve. A large cash reserve can lead to
financial freedom which means less anxiety about our financial condition.

iv. Prepare for emergencies

Saving for a raining day or an emergency savings fund is a safety net that protects
you when an unexpected event - such as a medical emergency or unemployment

can cause a financial crisis. Without access to cash, we might be forced to borrow
money which end us up to pay interest. By having enough money in investment

helps us create a financial cushion for our family.

v. Fighting inflation:
A good way to beat inflation is to park our money in investments that offer returns

that are higher than the rate of inflation. Thus, Investments help us protect our
capital against price rise.

1.5 FINANCIAL SYSTEM’S USERS/CLIENTS

We can divide the customers of the financial system to the three categories,

Business/
Private Sectors

Household Government
Sector Sectors

Financial
System's
User/Clients

namely: -
i. Household Sector

Household sector is among the consumers and a major contributor in the financial
system. In general, household’s investments are not only focused on owning the physical

assets such as houses, land and cars but they also invested in financial assets that have

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