Investing
Zoe Team
5 min read
Extreme doomsday prepping can distract from sound personal financial management.
Prioritizing practical security needs is more effective than speculative survivalist investments.
Balance your long-term wealth goals with reasonable emergency preparedness.
Personal finance experts generally advise against survivalist spending, as it rarely contributes to long-term wealth accumulation.
Focus on building a robust emergency fund and maintaining traditional insurance rather than investing in speculative disaster supplies.
Obsessive survivalist spending can deplete capital that would be more effective if invested in diversified assets.
“If the world ends - and not even if the world ends, but if we have trouble - getting contacts or glasses is going to be a huge pain in the ass. Without them, I’m f**ked.” - Steve Huffman, the thirty-three-year-old co-founder and C.E.O. of Reddit, when explaining to Evan Osnos why he had laser eye surgery to correct his nearsightedness.
Contrary to what you may think, today’s doomsday preppers, or survivalists as they are also called, are not only old folks in middle America stock-piling tinned goods.
Even our founder, Andres Garcia-Amaya (a big fan of The Walking Dead… obviously) has a contingency plan for what he would do if a Zombie apocalypse should descend upon us.
Should we really be afraid of an impending doomsday? The quick answer is no… surely not? But with Earth Day around the corner (this Saturday to be exact) and the devastating effects of climate change bombarding our newsfeeds, maybe preparing for a quasi-apocalypse isn’t that far-fetched.
So what does the CDC recommend you have at your disposal? Here is their list:
Water - 1 gallon per person per day
Food - stock up on non-perishable items that you eat regularly
Medication - this includes prescription and non-prescription meds
Tools and Supplies - utility knife, duct tape, battery powered radio, etc.
Sanitation and Hygiene - household bleach, soap, towels, etc.
Clothing and Bedding - a change of clothes for each family member and blankets
Important Documents - copies of your driver’s license, passport, and birth certificate
First Aid Supplies - although you’re a goner if a zombie bites you, you can use these supplies to treat basic cuts and lacerations that you might get during a tornado
or hurricane. Source: CDC.
Come to think of it, preparing for a catastrophic event is not too dissimilar to setting up an emergency fund.
Now even if we disagree on whether or not doomsday is around the corner, we can all agree that the only thing more boring than setting up an emergency fund is reading about one! But before you drop off, bear with us. In our ongoing effort to help you better understand your personal finances we’ve jotted down the 3 main points of an emergency fund, short and to the point!
An emergency fund is one of those things that you know you should have, but haven’t gotten around to creating. We all know that life can throw some pretty unexpected challenges our way, normally when we least expect it. These challenges could be anything from losing your job, to expensive car repairs, to having to travel at the last minute for a family crisis. An emergency fund is a financial safety net for such things.
Experts generally suggest keeping the equivalent of 3 - 6 months salary aside that you can use to make it through a rough patch. It acts as a buffer so that you don’t have to take money away from important monthly bills like mortgage payments, school fees or even better, you don’t have to adjust your lifestyle in any way.
Even though you may be earning a hefty salary, if that suddenly stops, you’ll be surprised at how quickly your bank balance can dry up. It’s not a position anyone wants to be in, and it’s totally avoidable with a little bit of planning.
“It takes as much energy to wish as it does to plan” - Eleanor Roosevelt
As fast as money seems to dry up when there’s nothing coming in, it too can pile up much faster than you would think when there’s nothing going out. Creating an emergency fund is very easy. The best way to get started is to first create a separate savings account and deposit money at the beginning of each month (you tend to miss it less than if you transfer it at the end of the month). Once you have the required amount in the account, you can stop depositing the money and forget about it until you need it.
Just remember these 3 words: SAFE, RELIABLE, ACCESSIBLE
Safe: Although you may be tempted to keep cash in your home, in a safe for example, it isn’t necessarily the safest choice. By keeping your money in a bank account, the bank will insure that money (up to $100,000 per account) and it will be there no matter what. No natural disasters, fires, theft, etc. will be able to affect it.
Reliable: Investing in stocks could be more lucrative than putting your money into a savings account (normally). And although we suggest investing over saving under normal circumstances, when it comes to an emergency fund you need to be sure that your money isn’t dependent on outside forces. If the stock market crashes you don’t want to lose any of what you’ve saved, because you need this money to hold its value.
Accessible: Another reason to have your emergency fund in a savings account instead of invested in stocks, bonds, or property, is that when you need it, you’ll need it now. In other words, you want your emergency fund to be as liquid as possible, and you don’t get more liquid than cash - well, unless Zombies are upon us… then water would be the liquid of choice! (Source: The Simple Dollar).
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