Why You Should Not Save For Emergencies
Saving for emergencies versus saving for opportunities is a very sensitive topic with extremely divergent views and opinions.
How many MILLIONAIRES do you know who have become wealthy by investing in savings accounts? I rest my case!’ – Robert Allen
I have read a lot of books and articles that talk about saving up for emergencies as one of the best practices towards financial freedom. They recommend that that you should have at least 6 months to 1 year savings to take care of unexpected financial emergencies.
I don’t agree with this school of thought. I have learnt that you attract what you think. If you think about problems and prepare for them, you will inevitably attract them. They will find you ready and you will feel extremely good that you beat them to their game. On the other hand, if you prepare for opportunities, they will come knocking on your door and you will seize them in a huff.
Being a cautious person who is always saving up for emergencies simply means that you will be well cushioned in case problems arise. However, you will miss out on the tough money lessons. Wallace D. Wattles the author of “The Science of Getting Rich”, in an article, titled “The Constructive Attitude”, said:
“… do not lay up for a rainy day. If you live right, think right, and work right, there will never be a rainy day for you. If you lay up for a rainy day, you will impress the sub-conscious with the fear of a rainy day; with the idea of weakness and incompetence, and so you will cause the rainy day to come.”
Tony Mase alludes that this does not mean that you shouldn’t save for rainy days at all. In the same article, Wallace said this:
“… provide a surplus, so that you may take advantage of any new opportunity…”
Financial freedom requires a complete overhaul in the way you see things. It entails a paradigm shift to your mind, thoughts, attitude and beliefs. Having studied so many successful and some of the richest people in the world, I discovered that their thoughts and mindsets are different. You see, they are always thinking in terms of opportunities and are willing to risk it all for an opportunity they believe in. Statistics have shown that the average millionaire has been bankrupt 3.5 times in their lifetime. There are many stories of the rich and famous who went bankrupt but bounced back: Donald Trump, Henry Ford, Abraham Lincoln, Walt Disney, Tommy Hilfiger, Simon Cowell and so forth.
Had they saved up for emergencies as recommended by personal financial management experts, I don’t think that they would have gone bankrupt. A typical entrepreneur is a risk taker who would put his / her entire life on the line for a business that he / she believes in. The entrepreneur could fail so many times due to the fact that they risked it all, before he/she makes it in life. But what we see is the tip of the iceberg masking itself as an overnight success. The hurdles, challenges, and hardships that they went through are below the water and are invisible to us. The rich and successful people learnt from their challenges and became good at the game.
Related post: The Dark Side of Entrepreneurship
So, think twice about saving up for emergencies
“for a man is what he thinketh” (Proverbs 23:7).