Ramit Sethi argues that an emergency fund matters more than chasing market gains. Most people can't save $100-$500 monthly, and betting everything on a 15% market rise ignores the inevitable downturns ahead. Warren Buffett's "who's been swimming naked" metaphor captures the risk: when markets crash, you'll wish you had cash.
It's a lot like flossing. I know I should do it, but I don't. Also, a lot of people have not mastered their own money enough to be able to set aside $100 or $500 a month for an emergency fund. Also, a lot of people treat you like a loser. I get a lot of comments saying, Ramit, you told us to save money, but the market's up 15%. Such an idiot. That works while the market is going like this. But the minute the market turns down, you will see, as Warren Buffett puts it, Who has been swimming naked? I would rather lose a tiny little bit to investment returns by having a fat war chest of an emergency fund instead of putting everything in the market, knowing that I can sleep well at night when things go down. And they will, because nobody, not the government, certainly not some crypto bro on TikTok who has a GED, not even the top economists can predict when things will turn. But if you have a war chest, you don't need to. You are already prepared.
