Don’t be like Hosni - MoneySense

Don’t be like Hosni

The fall of Egypt’s former strongman contains a lesson in risk management.



Thanks to recent events in Egypt, I have a new appreciation for emergency funds.

Here at MoneySense we’ve been saying for years that it’s a good idea to build up a reserve fund equivalent to 6-months of your salary to protect yourself from unforeseen events such as a job loss or medical emergency. Makes sense, right?

I mean, anything can happen. You could be the victim of a terrible bowling accident. Your identity could be stolen. The global economy could suddenly shift, making your job—or entire field—obsolete. That annual can’t-lose bet against the Toronto Maple Leafs winning the Stanley Cup might … ok, that’s not a good example, but you get the point.

I follow a lot of the advice we dispense on this web site. I have a TFSA. I invest in mutual funds and contribute to RRSPs as part of a financial plan. And I make an effort to save as much as I can on a monthly basis. But until the other day, I never took action on the one thing that could save my finances should fate decide that I can’t make money for awhile.

I’d like to thank Hosni Mubarak for that.

You see, Hosni’s 30-year reign as autocrat of Egypt recently came to a rather abrupt end, to the surprise of almost everyone—especially him. Despite the fact that he had three decades to come up with a plan for such a possibility, he obviously overlooked a few things. Now he’s not only out of a job, but his family fortune—reported to be in the tens of billions—is at risk of being frozen or seized.

While I don’t aspire to occupy the throne of a large, culturally significant country anytime soon, there is a lesson I can draw from Hosni’s downfall: hope for the best, but prepare for the worst. At this stage in the game, it appears that Hosni failed to do the latter. And if it can happen to one of the world’s longest serving leaders, it can happen to me.

So to avoid Hosni’s fate, I am hereby launching my own emergency fund today. I’ll call my bank and set up an automatic withdrawal plan for 5% of my salary, to be deposited in a high-interest savings account. has a handy comparison tool that shows you who has the best rates, if you’re curious.

With a little luck, I won’t need this fund. But Hosni’s experience—while admittedly an outlier—illustrates what a lack of planning can reap, writ large.