Why NOT SAVING is only for the very brave

We think that all economic world crises happen only when things go really bad and this is only about twice every 10-20 years …think again.

When I researched a list of the past economic crises that took place only in the 21st century I was shocked to see the number of times countries have had major problems. If one country has economic problems- all the investments (retirement/pension/unit trusts/eft`s/shares) out there are influenced negatively.

Enter the nifty emergency fund:

This type of emergency fund I am referring to must be:

-built up to 3-6 months of living expenses to really cushion you from any bad situations (retrenchment/pandemics/loss of monthly income/big emergency expenses like new tyres/old age parents in financial trouble/wear and tear on your vehicle or around your house).

-you know you are in the right emergency type account/investment when the interest rate is very low, in line with inflation or even lower- this is because this type of fund is for immediate use and not long-term capital growth to beat inflation. Low interest rate accounts have utility in that they are LOW RISK over the short term.

– An emergency fund is not an overdraft and not a credit card. If It has an interest rate attached to it and if something really goes pear shape (like you having a lot of debt and you lose your job, you will have a lot of trouble trying to pay off that debt with zero income.

-Saving is NOT the same as investing. Saving is for your short-term needs aka emergency funds or saving towards a trip/holiday (less than 1-2 years).

-An emergency fund should also not be locked up for 30 days or longer. Some banks offer 32- day call accounts or 5 year guaranteed investments that locks up the money to let it grow at a higher interest rate- not suitable for 24-hour emergencies.

You cannot afford to save for any goal that is more than 3 years away in a normal bank account with low interest rates- your money`s value is going BACKWARDS in time in a bank account (inflation is not your friend).

When the price of stuff goes up by 2%-5% every year and the growth in your savings account is 3% you can buy less with the same money you have available today for stuff 3 years into the future. You have inflation risk if you save all your money in a bank account as well.

Here I reference the list of economic crises that we lived through and that impacted us directly or indirectly:

21st century


Argentine economic crisis (1999–2002)

Early 2000s recession (2001-2002)

Dot-com bubble (2000-2002) (US)

2001 Turkish economic crisis

2001 September 11th Attacks

2002 Uruguay banking crisis

Venezuelan general strike of 2002–03

2007-2009 Great Financial Crisis

Late-2000s recession (worldwide) (2010)

2000s energy crisis (2003-2009) oil price bubble

Subprime mortgage crisis (US) (2007-2010)

United States housing bubble and United States housing market correction (US) (2003-2011)

Automotive industry crisis of 2008–2010 (US)

2008–2012 Icelandic financial crisis

2008–2010 Irish banking crisis

Russian financial crisis of 2008–2009

2008 Latvian financial crisis

Venezuelan banking crisis of 2009–10

2008-16 Spanish financial crisis


European sovereign debt crisis (EU) (2009-2019)

Greek government-debt crisis (2009-2019)

2010–2014 Portuguese financial crisis

Crisis in Venezuela (2012-now)

Ukrainian crisis (2013-2014)

2014 Russian financial crisis

2014-2017 Brazilian economic crisis

2015 Chinese stock market crash

Turkish currency and debt crisis, 2018

Argentine monetary crisis


COVID-19 recession

Economic impact of the COVID-19 pandemic (2020-present day)

2020 stock market crash (2020-)

Black Monday (March 9) Worst dip in investment markets since 1929

Black Thursday (March 12) Second worst dip since 1929

Lebanese liquidity crisis (current)

Crazy isn`t it? Not saving is really for the very brave.