The emergency fund is a trap 🚨

The emergency fund is a trap 🚨

The emergency fund is a trap.

You should build an options fund instead.

And I’m not talking about day trading call or put options in the stock market.

The traditional emergency fund is for unexpected expenses like lost income from unemployment and major car repairs.

Every financial guru out there advocates for an emergency fund.

The problem is that an emergency fund encourages a scarcity mindset. πŸ˜₯

This prevents you from taking necessary risks for personal growth.

Those risks require money.

If you’re too afraid of losing money, it might prevent you from building long-term wealth like:

β†’ starting your own business

β†’ expanding your skills through education

β†’ or investing in your retirement.

However, an options fund develops an abundance mindset. πŸ“ˆ

The abundance mindset is the belief that there is enough wealth out there for everyone.

My options fund gives me the time and freedom when something in my life is not working for me.

If I hate my current job, I can quit.

If I'm laid off, I can say β€œno” to the first job offer.

If I want to spend more time with my loved ones, I can do that.

All because of my options fund.

Instead of living in fear for some future crisis, you can live with gratitude to seize future opportunities.

How would I do that?

I ask myself these questions:

  1. What parts of my day bring me the most joy?
  2. What would I do for free regardless of the results?
  3. Who do I want to become 10 years from now? 3 years from now? 6 months from now?

These questions help define the life you want to live and the money needed to make that life a reality.

And it's okay if you don't have answers to these right now. To this day, I continue to change my answer because it hasn't totally clicked for me.

Six months since exiting my previous company,

  1. My identity has been largely defined by the hustle culture of high-growth startups. I became impatient and emotionally numb as means to cope with the anxiety and stress associated with my previous role.
  2. Learning to slow down and being more present have been surprisingly difficult. I became more aware of what I do during the day and how I feel doing these activities.
  3. My social conversation skills with friends and strangers have deteriorated immensely. The resulting disconnection and isolation accelerated the emotional numbness. Instead of waiting for the invitations, I am being more proactive by reaching out, suggesting activities, and planning more events.
  4. On the positive side, my physical condition has improved drastically. While I was still floating with the lack of back-t0-back meetings, I made it a point to go outside and work out 4-5 times per week. I started playing tennis again, and I forgot how satisfying a clean groundstroke feels with a racket.

If I had an emergency fund, I would be scrambling to find my next startup gig and accept the first reasonable offer.

The options fund gave me the space to reflect on my values and think more intentionally about the next phase of my life.

So would you rather have the options fund or the emergency fund?