The following is an anonymous post in the Facebook group Asan Ideas for Wealth (AIFW) reproduced here after its admin, Ashal Jauhari’s suggestion.
“A real-life example to prove that there are only two kinds of people – those who have faced emergencies and those who have not. In the example below, this old friend – an AIFW member – freefincal reader was serious enough to hold an emergency fund” – Ashal.
Dear Ashal Bhai, would you please share this post in the group on my behalf? It contains personal details, so I want to post it anonymously. Over the years in AIFW, a lot has been discussed about the importance of having an Emergency Fund. Ashal Jauhari has made countless posts/comments on it. Pattabiraman Murari has written several articles about it on freefincal.com. This is an account of my personal experience.
Around four months back, my mother was hospitalised with acute stomach pain. Shortly, the doctors had to perform an emergency surgery. And a few days later, she was diagnosed with colon cancer, stage IV, not curable, terminal. She was at the hospital for about one month. After discharge, she was at home for around three months. She passed away three weeks back.
She had sufficient health insurance, which covered most of the hospitalization bill. Given the prognosis, we consulted multiple oncologists from across the country. They advised some more cancer-related diagnostic tests that were quite costly. We also got second opinions from two of the world’s top cancer hospitals: New York and Seoul.
Those opinions came attached with a very high price tag. Due to the surgery, she required weekly dressings that had to be done by a specialist and supported by several surgical items. A doctor specializing in palliative medicine visited her regularly at home and prescribed medicines to manage the many symptoms caused by cancer.
Provisions were made for oxygen support at home, along with several other kinds of medical and non-medical arrangements. And no insurance covered the cost of *any* of those things.
But cost/insurance/money was the least of my worries during that period. The only things that mattered were what can I do to provide the best available treatment for my mother, how can I ease her pain and suffering as much as possible, and how can I provide her with the best possible care.
I could afford not to worry about money because, at the back of my mind, I knew I had a sufficiently large Emergency Fund to cover everything coming our way. Even though I was not necessarily using that fund right away. I was not in a mental state, nor had the time, to redeem from this mutual fund, break that fixed deposit, or do something else to a similar effect.
In fact, I had paused all my investments. Because such things simply no longer seemed important enough at that time. I knew all of those could be sorted out later. The only thing that I continued to do was pay my credit card bills on time. I’d read this somewhere: during a real emergency, every fund is an emergency fund (probably in freefincal.com, but maybe not in those words). They could not have been more true. Editor’s note – probably this post: Can you handle it when your entire wealth becomes an emergency fund? Also, see: What they don’t tell you about the emergency fund!
I had always imagined that the Emergency Fund would be what I’d be using *during* an emergency – sweep fixed deposits, liquid funds, etc. What had never occurred to me was that it could serve another purpose also. Become the source of a huge psychological relief, that I need not worry about money when money is needed the most, that I can afford to completely focus on the actual reasons why money is needed and not on the supply of money itself.
The previous sentence may seem confusing, particularly to those who have not yet faced a real emergency in life, especially a critical medical one. But, after having gone through such an experience, I found that realization to be profoundly significant.
Of course, each one of our circumstances is different, as are our experiences and ways of dealing with life. But regarding the financial aspects, nothing compares to being prepared to face an emergency. Nothing! That’s why in the BASICs (see the Featured section of this group), the first three points are all related to life’s emergencies. Everything else comes later.
Do share this article with your friends using the buttons below.
🔥Enjoy massive discounts on our courses and robo-advisory tool! 🔥
Use our Robo-advisory Excel Tool for a start-to-finish financial plan! ⇐ More than 1000 investors and advisors use this!
New Tool! => Track your mutual funds and stocks investments with this Google Sheet!
- Follow us on Google News.
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Join our YouTube Community and explore more than 1000 videos!
- Have a question? Subscribe to our newsletter with this form.
- Hit ‘reply’ to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.
Get free money management solutions delivered to your mailbox! Subscribe to get posts via email!
Explore the site! Search among our 2000+ articles for information and insight!
About The Author
Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over nine years of experience publishing news analysis, research and financial product development. Connect with him via Twitter or Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.
Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course! Increase your income by getting people to pay for your skills! ⇐ More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts you and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!
Our new book for kids: “Chinchu gets a superpower!” is now available!
Most investor problems can be traced to a lack of informed decision-making. We have all made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, what would it be if we had to groom one ability in our children that is key not only to money management and investing but to any aspect of life? My answer: Sound Decision Making. So in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parents plan for it and teach him several key ideas of decision making and money management is the narrative. What readers say!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. – Arun.
Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or you buy the new Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low volatility stock screeners.
About freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any paid articles, promotions, PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications
You Can Be Rich Too with Goal-Based Investing
Published by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
This book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.
Your Ultimate Guide to Travel
This is an in-depth dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)
