Thank you for sharing your thoughts Joseph.

I will note that while the liquidity of a 401(k) and house equity are much lower than say a checking or savings account, they are not completely illiquid.

Many 401(k) plans allow, for example, for loans against the account balance. As for your home’s equity (if any), that can be tapped using e.g. a Home Equity Line of Credit (HELOC).

Of course, it’s much better to avoid both of those, since they’re not really intended for this purpose. Also, a HELOC is easier to establish before you need the money, because if and when you lose your job, it’s less likely that a lender would approve the HELOC.

Having said all this, I agree that for most people, having an emergency fund in the classic sense, of highly liquid financial assets is best. As for whether that should be 3, 6, 9, 12, or more months’ worth of expenses, it depends on many factors and what’s right for you won’t necessarily be right for everyone else.