Have you ever watched that show Doomsday Preppers?
If you haven’t, all you need to know is that these people were doing one thing: preparing for extreme emergencies.
Does he look exactly as you thought he would?
But what about financial emergencies? Is the solution also to have 4,000 cans of beans in your basement? It is NOT.
The usual advice is to build 3-6 months of expenses in a separate fund that you can tap in case of emergencies. That’s not bad advice, it’s just incomplete.
Like those Doomsday Preppers, you want to be more than vaguely prepared for emergencies. You want to be ready for anything.
Most aren’t prepared
For context, nearly 40% of Americans couldn't cover an unexpected $400 expense with cash. An emergency fund helps you survive that.
It makes you robust and able to take a punch.
Thankfully, this number has been getting better.
Take it to the next level
But what if you could build a system that doesn't just survive a punch, but actually gets stronger from it?
That’s the difference between being robust and being antifragile, just like that guy in the movie Unbreakable…minus the water weakness. SPOILER ALERT.
Was this Bruce Willis at his best? TRICK QUESTION. Obviously that was Die Hard.
Your goal isn't just to weather the storm; it's to be the ship that uses the storm's winds to go faster.
Here’s how you build an antifragile financial system.
1. Tier Your Liquidity
A single savings account is a rookie move. The pro-level strategy is tiered liquidity:
Tier 1 (Instant Access): One month of expenses in your primary checking account. No friction.
Tier 2 (Fast Access): 3-5 months of expenses in a high-yield savings account or money market fund. You can get it in 1-2 days.
Tier 3 (Crisis Access): A line of credit (like a Home Equity Line of Credit, or HELOC) with a zero balance. This is your backstop for a true catastrophe, protecting you from having to sell investments at the worst possible time.
2. Diversify Your Income
The single biggest risk to your financial plan isn't a market crash; it's the loss of your primary income. The ultimate defense is not having all your eggs in one basket.
Start small.
Turn your professional expertise into a small consulting side-gig. Monetize a hobby. Even an extra $500 a month diversifies your risk profile dramatically.
See our newsletter on passive income for inspiration.
3. Build a 'Crash Fund'
This is the game-changer.
A "crash fund" is a dedicated pool of cash outside your emergency fund. Its only purpose is to buy assets when the market is plummeting.
This turns your cash from a safety net into a weapon. HOO RAH!
This simple allocation transforms your psychology from fear to opportunity. When others are panic-selling, you'll be executing a plan.
It’s a perfect example of the legendary investor, Warren Buffett’s, famous saying:
4. Stress-Test Your Insurance
Your ability to earn an income is your single greatest asset. Are you protecting it?
Review your disability insurance (both short-term and long-term) from your employer. Does it cover at least 60% of your gross income? If not, look into a supplemental policy.
It's a small price to pay to protect your entire financial future.
5. Write Your 'Emergency Playbook'
When a crisis hits, your brain goes into fight-or-flight. You can't trust it to make optimal financial decisions. So, make them now.
Create a one-page document that answers the critical questions:
What's the first account I draw from?
What discretionary spending gets cut immediately?
Who do I call?
This playbook removes emotion when you're under extreme stress.
Sound like a pain to write this? We built one for you!
Check it out here: Financial Emergency Playbook
Ready for the Apocalypse
Do you need to be as extreme as those Doomsday Preppers? Absolutely not. Those guys are mostly unhinged.
But, being truly prepared for emergencies will make you more confident for your finances as a whole.
When you’re ready for the worst, you can plan for the best.
Happy Prepping!
