Investor Sergey Grishin has told Russian savers that an effective emergency fund should cover at least three months of living expenses.
Speaking to the Russian news outlet Lenta.ru, the serial entrepreneur suggested starting with smaller monthly sums rather than straining household budgets with unrealistic targets from day one.
Grishin explained that the simplest and most conventional way to build savings is to put aside a third or a quarter of a monthly salary. However, he cautioned that this standard approach often proves to be an ordeal for household finances and causes people to give up.
He advised workers to lower the initial threshold and save a modest amount of around 10 per cent instead. Starting at that level, he said, significantly increases the likelihood that someone will actually succeed in accumulating a durable financial cushion.
Bank deposits and stock market returns
Grishin noted that savers should avoid keeping their spare cash tucked away under the mattress. By holding money in a bank or purchasing shares, individuals can earn risk-free returns starting from 14 per cent, he said.
Under favourable conditions on the stock market, annual returns can reach up to 40 per cent, the investor added.
Financial planners generally define an emergency cushion as a pool of easily accessible funds set aside to weather unexpected disruptions, such as sudden illness or unemployment. Keeping money in formal banking products allows savers to counter the effects of inflation while retaining immediate access to their capital.
Liquid assets and property savings
Grishin also suggested that purchasing high-value, liquid items can serve as an alternative financial reserve. He pointed to cars, jewellery, and watches as assets that can be quickly liquidated and turned back into cash when required.
Because such valuable possessions can be sold rapidly despite not being everyday essentials, they can legitimately be treated as part of an emergency safety cushion, the entrepreneur said.
Liquidity refers to how quickly an asset can be converted into standard currency without suffering a significant loss in value. High-end watches, precious metals, and used motor vehicles often retain value well and can be sold rapidly through secondary markets.
The advice follows earlier recommendations from Grishin on how prospective buyers can enter the Moscow property market. He previously outlined a method to accumulate a mortgage down payment in the capital, suggesting that savers could either put away 30,000 roubles every month or place their savings into a bank deposit account.
