Ramit Sethi responds to the question of whether to prioritize investing or building an emergency fund by advocating a 'yes and yes' approach—simultaneously pursuing both. He illustrates the philosophy with a high-school anecdote about taking the harder class and still achieving high marks, using it to justify choosing both options rather than one or the other.
Do I prioritize investing or building an emergency fund? What would you prioritize your savings on emergency fund and investment? My answer is yes. I have this philosophy called yes and yes. And I first noticed it when I was in high school, and I remember I got these college applications from all these colleges, and they have an FAQ at the end, and these were pretty selective colleges. And they would say, should I take the easier class and get an A or should I take the harder class and get a B? That was the question. And the college's answer was, well, we always encourage students to take the more challenging class, but in our experience, the students who come here take the more challenging class and they get an A. And I was just like, oh, my God, bow down. I respect that. Because they're just saying, look, we're looking for the best, and the best tend to do yes and yes. So sometimes when I hear people say, should I do A or B? My answer is just yes.
