Capital Propulsion breaks down practical investing decisions in plain English. This companion article expands on the video so you can review the key ideas, compare the tradeoffs, and come back to the framework later.
Watch the full video on YouTube.
Key takeaways
- Size Your Fund By Costs
- An emergency fund is measured in months of costs, not months of income.
- Add up what genuinely must be paid each month and multiply by the time it would take to be earning again.
The core idea
An emergency fund is measured in months of costs, not months of income. Income is what stops in an emergency; costs are what continue, and only the second one tells you how long you could survive without the first. Then adjust for how replaceable your work is, because a specialised role takes longer to replace than a common one.
Add up what genuinely must be paid each month and multiply by the time it would take to be earning again. The number is personal, and it is not a rule you can borrow.
Bottom line
The goal is not to chase every headline. It is to build a repeatable decision process: understand the risk, compare the opportunity cost, and make choices that fit your time horizon.
Quick investor checklist
- What problem is this investment decision supposed to solve?
- What are the fees, taxes, and concentration risks?
- Would the decision still make sense if markets moved against you for a year?
- How does it fit with your existing portfolio and time horizon?
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