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what emergencies could justify a highly liquid emergency fund?
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emergency funds are defined in terms of months of tightened-belt living -- that's according to the usual gurus such as suze orman, dave ramsey etc.   they aren't for short-term emergencies like a blown transmission.  use other money for those.  why?  people with bad financial habits have short-term emergencies all the time, and that emergency fund doesn't have a chance of lasting.  this is just their financial habits manifesting.  here's what an emergency fund is for.    scenario: big economic bubble bursts.  stock market drops 50%.  credit dries up.  this happened in 2007 by the way.  the dominoes start falling boom, boom, boom: i'm exaggerating a bit here, but a lot of people lived at least half this stuff in 2007-11.  nothing starts those dominoes falling like lack of cash at a key moment.  that's what an emergency fund is all about - keeping things tight-normal for long enough to get back on your feet.  if you want to keep your emergency fund in something risky -- keep a lot more of it!
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