Hello L&G. Here is the situation. I am in the process of purchasing an old home and the mortgage, taxes, & insurance on the 30 year fixed is about $2200/month (but planning to make 2x payments to get rid of it in 14-15yrs). My wife and I both work and earn about 185k/yr, split about 80k/105k excluding small bonuses. After the dust settles on closing, I should have about 60k in cash leftover. I was anticipating an emergency fund of 40k which should float the full boat for 8 months at 5k a month comfortably, plus 10k car emergency fund (i currently drive a 99 and my wife just walks/bikes). A side note too is we have a condo in calgary, AB which is rented, but is a potential liability with the down market. I have about 25k in funny money in the bank up north to cover a years mortgage there in case things really head south.
My question is... do you feel this emergency fund of 8 full months of expenses + car fund to total 50k is too much with 2x people working? Im not planning to move the CAD money lower than that at this point until we ditch the condo. Even if I lost my job, we could still float the boat on my wife's salary nearly indefinitely while I find something else. Do you feel we should scale it back and try to make some money off the cash?
Second, what do I do with my emergency fund? I have my cash in a capital one account paying 1%. Even if I am convinced to reduce the E-fund, I don't see myself buying into the market too aggressively with the market so hot right now. Maybe I could buy in slowly over a full year or something. Not sure what to do here.
Thanks.