I told my dad his savings advice was wrong for 10 years, then the recession hit in 2008 and he was right all along

Back in 1998 my dad told me to keep 6 months of expenses in cash, not stocks or bonds. I laughed at him. I was 22 and thought I knew everything about investing. I kept putting every spare dollar into tech stocks instead of building that cash cushion. When 2008 came I lost my job at a print shop in Akron when they shut down. I had zero savings in cash. Everything was tanking in the market. I had to borrow 3,000 bucks from my parents just to cover rent for 4 months. That cash buffer would have let me sleep fine through the whole thing. After that I built my own 6 month fund and never touched stocks with that money again. Has anyone else had an older relative give you advice that you ignored until you got burned?

3 comments

3 Comments

lewis.finley4d ago

Took me getting laid off twice before I finally listened to @jana_shah's dad too. I keep exactly 6 months of rent and groceries in a high yield savings account now, no excuses. It just takes one bad month to make that cash cushion feel like the smartest move you ever made.

phoenixw114d ago

Man you're so right about this. It's like we all have this idea that life is a straight line and then reality hits you with a curveball and suddenly that boring safety net looks like genius. The older generation didn't just stumble onto this stuff they lived through enough bad times to know you can't predict everything.

jana_shah4d ago

My dad gave me nearly the same advice and I still kept spending like there was no tomorrow.