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What can be done to brace for a market crash? What did people need that they didn’t have in March of 2020? This is what individuals, households, businesses, and countries need to have but didn’t in the Spring of 2020:


Over the past three decades, bubbles have been inflated and have popped stealing wealth of investors.

When the market lost 33% over the course of four weeks from February to March, many people found that their businesses and their personal financial lives were not as predictable as they had hoped. Many lost their cash flow in the form of a regular paycheck as well much of the value of wealth set aside for retirement, if they had any set aside at all!

With much of their wealth shoveled into mutual funds exposed to Wall Street, losing a third once again means reevaluating retirement plans, how long one works, and the lifestyle your savings can provide.

What many people, businesses, and countries don’t have today is a rainy-day fund; technically: an Emergency Fund.

Perhaps financial resilience is not what you need, or not within reach at the moment because you are out of work.  Consider then your professional resilience in how not to depend upon other people’s willingness to trade their money for your time and skills.  That’s a job.  How do you prepare to offer your current, past, or future skills to people who would benefit from your help?  That is business.  My video series on Financial Education can help you with that.

It Happens on a Regular Basis

Living pay-check to pay-check puts your personal security in the hands of someone who tells you what you’re worth, usually on an hourly basis. In Spring of 2020, with government instigating and some insisting on suspension of business operations across many states in response to a health crisis, we’ve found that we are not financially secure; or “Anti-fragile”.

I try to help people who seek my assistance at whatever level they contact me. While my financial services BEST serve the needs of those with good cash flow, ample savings, and investment wealth, I have authored a book and online courses that help people improve their personal finances. When they improve their personal finances, they often find they become ready for that financial services “next-level help”.

So, how do I build an Emergency Fund? I’ll use “EmF”.

MoneySmart, 2nd Edition

How to Build Your EmF

First, you’ll need a monthly budget. Why? Your budget will provide levels of income and expenses so that you know what you have to work with! Income minus expenses is discretionary income; or “your financial power”. When you know that answer, you’re ready to set a financial goal.

Your budget should tell you how much money you’ll need to cover your monthly expenses every month. When you know that answer, the next factor in the equation becomes, “how long will it take you to find a job that pays what your current job pays you?” How long will it take to replace the cash flow?

Once you have those answers for each person in your household supporting your cost of living, it’s just 5th grade math! I need (X) expenses for (M) months for partner 1 and 2. Goal number 1, one month of expenses in savings. Goal number 2, cover the emergency fund for the lesser cash flow partner. Goal 3, cover the emergency fund for the larger cash flow partner. Goal 4, cover the emergency fund for BOTH partners. Once you get your Emergency Fund past month two, what location and form you are holding your funds in then becomes important.  That issue becomes another discussion…


A young couple, Steve and Mary do well for themselves. Steve is a mechanical engineer with a local established firm. Mary is still taking classes and works as a lead barista in a popular locally owned restaurant.

Mary has good taste in music and t-shirts!

We could throw a wrench into this and consider how the virus crisis of early 2020 has impacted the restaurant business, and whether it’s still in business, but we’ll keep it simple. The only thing that would change is how long it takes to find another job as a talented barista with a good reputation.

Assuming a GOOD economy, a good barista could find another position in just a few weeks, if that long. Mary’s EmF then may be considerably smaller than Steve’s. Steve has been doing specific work for his employer developing solutions for an aerospace firm, therefore has a unique, well compensated, but specialized skill set. Keeping his contacts open, he finds that employers that would benefit from his skills open up positions every 8 to 12 months.

So, if their household expenses total $3500, Mary’s EmF is (1*3.5k=3.5k) or $3500. Steve’s starts at (8*3.5k to 12*3.5k) or $28,000 to $42,000. Their total EmF to be Anti-Fragile would be Steve’s $42,000 plus Mary’s $3500 or $45,500.

That may sound like alot of money to most, and it is! However, it depends upon your cash flow minus expenses and how much discretionary income you allow yourself access to each month!


Much of this comes down to personal choices! If both Steve and Mary were baristas, the story would be much different. Though Steve got through school first, likely a few years older, and is supporting their marriage and household a bit more while Mary finishes school. In addition to Steve doing well, despite a good income, the two have chosen to keep their expenses as low as possible. This gives them more stored work energy, more disposable income with which to work!  Shocker, I know: life is a series of choices!  Get over it, get on with it!

Here are the numbers: Steve brings in $90,000 annually, added to Mary’s $26,000 annually, and after taxes on ~$117,000, they bring home about $99,000 annually or $8250 net each month. Having to cover $3500 a month in expenses, that leaves them with $4750 every month in stored work energy to focus on blowing up the goal that they have chosen together!

At that rate of discretionary income flow, they could have their combined EmF covered in as little as 9.6 months ($45,500/$4750). That’s assuming they did nothing extra for nine months… which is not likely. But, it’s a simple math problem!

This is where having an organized monthly budget becomes so valuable and such a time saver! It is here that you can see your income and expenses and make strategic decisions and anticipate the results. Adding $500 a month into the budget for “fun money”, dates, and other things takes their discretionary income (money they chose not to spend) to $4250. At that rate: $45,500/$4250 and it takes 10.7 months. With $1500 of fun money, it would take ($45,500/$3250) 14 months.

If your cash flow isn’t as good as our example, it simply takes longer. You might not need 8 to 12 months to find a replacement job, which puts you AHEAD of Steve with a smaller multiplier and possibly lower Emergency Fund total! The factors are unique for everyone, but very few people ever sit down and figure out what they need to secure their cash flow!

Feeling More MoneySmart?

Now you know how! The monthly budget chapter in MoneySmart can help you make quick work of finding the answers you need every month!

You can review how to build an emergency fund, where extra money can come from, and how to use an emergency fund to benefit your finances in my video: An Emergency Fund Helps to Build Wealth.  How big it needs to be and how quickly you can build are all dependent on your personal choices!

While you’re there, consider beefing up your financial resilience with the other videos in the series, or getting a copy of MoneySmart which will likely change your relationship to money forever.

Hopefully, given a little time and good planning, the next time we hit a financial crisis, you’ll have a sufficient emergency fund to cushion any cash flow interruption and you won’t need to panic!

With that level of financial security under your belt, you may even be ready for the Financial Services I offer to those looking to protect and grow their wealth with less market risk and taxation.  Share this link with family and friends using email and social media.  Many people today need good financial guidance and information, and someone you know may understand less and need more help than you did when you got here.  What if I didn’t take the time to type this out for you?  …choose to make a difference!

I wish you well.
Warm regards,

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