Why I Don’t Have an Emergency Fund?
Financial advisors are obsessed with the idea of having an emergency fund.
I’ve heard it countless times: first, you need to build an emergency fund that covers 6–12 months of your expenses, and after that, you’ll need to pay off your debts.
You’re supposed to keep this fund untouched and use it only in case of emergencies, such as losing your job or experiencing other unexpected financial setbacks.
There’s nothing wrong with this; it can be the best idea for many people who are in credit card debt, have a mortgage, or rely on a single source of income.
Personally, I have zero debt, own my apartment, hold a stable job (though recent layoffs across the tech sector have made me reconsider this stability), and I already have an investment portfolio that generates income and capital gains.
From my perspective, maintaining 6–12 months’ worth of cash reserves seems like a terrible idea, especially given the current rate of inflation.
I’m not a market timer; I prefer to be fully invested at all times.
But I always keep some liquidity in bonds. However, I don’t view them as an emergency fund; they are a part of my portfolio that serves to reduce overall volatility.
