In an ideal world, investors should have at least six months, and as much as two years, of living expenses set aside before they invest in stocks. Although you may not be there yet, it is a worthwhile goal. Having a sufficient cash reserve – in good times and bad – should provide flexibility and allow you to make rational, unforced financial decisions. The first step is to create a budget so that you can make saving a habit. The amount of this emergency fund should be based on your circumstances.
For 2020, you can make a tax-free gift of up to $15,000 ($30,000 if you and your spouse elect to split gifts on your federal tax return) to an unlimited number of individuals. A gift of an appreciated security is also a great way to transfer wealth while possibly reducing your future tax liability.