I was curious on the mustachian approach to the traditional "safety net", of ˜6 months of cash in a savings account for a rainy day. With net worth over $200K and my spouse and I both working, this safety net seems not as necessary as it once was, and not working for us as best as it could in an investment account, or even a low risk bond index account.
Net worth doesn't matter as much as income vs. expenses. What's the reasonable worst-case scenario you're planning for? If one of you lost a job, is the other job secure, and could you live indefinitely on that single salary? If so, ITA, you may not need much cash on hand. OTOH, you may want more if you both may lose your jobs, if you'd need to move and cover big expenses, if a job search may take a long time, etc.
In terms of cash vs. other alternatives, I prefer plain, accessible bank accounts/money market accounts, because the horrible things that make jobs go away also tend to make the stock market and real estate markets crash. For us, the first tech crash led to DH's plant closing when I was 8 mos. pregnant and working very, very part-time; we didn't have any choice but to take whatever new job he found, but when that was in a new state, we couldn't sell our old house, because all the layoffs killed the local RE market (stupid, stupid, stupid - never, ever again will I buy before selling). Our E-fund covered the @$1000/month gap until the old house sold. Line of credit/CCs? Sure -- but, you know, those tend to get pulled/frozen, too, and at the worst possible time (our HELOC was capped/frozen in the most recent crisis, in the middle of a home remodel; again, we were lucky we had savings to pay the rest of the bills).
To me, the whole point of an E-fund is to protect my downside if things really go in the shitter, so I don't see any reason to risk that in the hope of upside returns. Give me cold, hard cash.
