Fri Mar 14 2025, by Tyler Gardner

3 Compelling Reasons Against Creating an Emergency Fund for Financial Success

Here are three reasons why I would never create an emergency fund.

1. Opportunity Cost in Wealth Generation

Number one, it kills my ability to generate long-term wealth. A typical emergency fund sits in a savings account earning 1-2%, whereas a typical stock market fund earns 7-8%. Over 30 years, that could be the difference of literally hundreds of thousands of dollars of lost potential.

2. Unrealistic Emergency Scenarios

Number two, what Armageddon scenario are we actually thinking about here? A job loss, at the same time as a car repair, at the same time as a health crisis, at the same time when all of your assets are all of a sudden at an all-time low?

Sounds like the true emergency is that we didn't allocate your assets more effectively across asset classes, to avoid having them all plummet at once.

3. Real Problems and Financial Assistance

Number three, if it all did magically hit the fan at once, A, we'll probably have bigger problems on our hands, like aliens heading to Earth, and B, most emergency scenarios have delayed payment plans for those who need financial assistance without destroying your credit or incurring massive fees.

The only true emergency we have is your money not working as hard as it can for you, as long as it can.

If this is helpful, like and follow, and I'll keep trying to get you one step closer to where you need to be.

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