Okay, here is the definition in the wiki:NoVa Lurker wrote:Avalpert - I don't mean to pile on, but you should take a deep breath and read some definitions of what an emergency fund is. Maybe start here:
It is not about having cash in your pocket to bribe border patrol; it's a question of how you allocate your finances.
So, the goal of the fund is "a cushion of liquidity in the event of unexpected expenses". How does my scenario not fit that - the unexpected event is the request for a bribe at the border, in this instance the liquidity needed is cash in hand.Funds set aside for unexpected expenses and kept separate from retirement or other investments. The quantity of emergency funds is usually specified as an integer multiple of monthly expenses, e.g., Six months to one year's worth of expenses. Emergency funds should be invested in a highly liquid, low risk vehicle (e.g., money market, bank savings account).
The goal of the emergency fund is to provide a cushion of liquidity in the event of unexpected expenses.
Explain how this definition excludes my scenario?
See, and for me I want to be protected against even unlikely, or seemingly impossible or unimagined, bad events so long as the cost to do so is not unreasonable.
To me, I want to feel protected against reasonably possible bad events - job loss, huge stock market crash, a natural disaster that might actually affect me, etc.
Your emergency fund seems to be more about peace of mind (in which case those who don't need the fiction of a separate fund for peace of mind choose not to have it) while mine is actually to fund emergencies - it is about risk management.
My proposition here would be that, using the definition from the wiki, you should be thinking about it as a true risk management tool and true risk management is not limited to 'reasonably possible' events.