Ndubuisi Egwim compares an emergency fund to life insurance: you hope never to use it, but it's essential when disaster strikes. He pushes an 80/20 approach to personal finance: focus on three things that matter most, getting out of debt, building savings, and passive investing. Most wealth managers fail to beat the S&P 500.
I don't really think it should matter so much because your emergency fund is for emergency. It's not the type of money you want to need every day. It's like life insurance. Someone says, I hope my life insurance is a waste. I say, okay, good. That means I don't die before the life insurance runs out. Okay? Because if it's a waste, it means I just paid this life insurance, then I got to 65 and I didn't die, so my family didn't get life insurance. Okay, that's good. I live to 65. That's. That's the whole point. Your emergency fund is for an emergency. If there's an emergency, you get to use it. So I don't. I don't want to sweat the small stuff again. That's our approach to finance. We do 80, 20. Because some people say, I'm not investing in crypto. I'm not investing in this, I'm not investing that. I'm like, no, no, no, no. They are 80, 20. They are 80% of things that. There are 20% of things that do the heavy lifting for you, and that's getting out of debt, saving an emergency fund, and investing passively over the long term. Here's the dirty secret of the financial industry, and they don't like it when I say this because I'm in room sometimes. Financial coaches and advisors, 90% of wealth managers, professional investors, don't outperform the S P 500.
