THE GLOSSARY · ACCESS
Liquidity
Something unexpected lands and your money is in the walls. Liquidity is how fast an asset becomes usable money again, without a loss.
By the Yoseri News desk · · 1 min read
Something unexpected lands. You have the money — except it is in your home, in your car, or in an investment you would have to sell. Liquidity is how easily an asset turns back into money you can use, without knocking down its price or waiting.
It is the dimension people forget while building wealth. The same amount does not do the same job for you depending on where it sleeps:
| Rate | Access | |
|---|---|---|
| Cushion · savings | 3.10% | Immediate |
| Dated goals | 3.10% | Immediate |
| Investments | Variable | A few days, at market price |
| Property | — | Months, with fees |
Look at what that gives in practice. An estate of $342,520 in assets — $115,079 once your debts are subtracted — of which $294,200 sits in a home and a vehicle does not hand you that sum as room to manoeuvre. On the day it happens, only the first line of the table counts.
The reverse exists too, and it costs you money. $1,840 that never goes down, parked in an account at 0.05%, is too liquid for what it does. Liquidity is paid for — in return you never earn.
In Yoseri, what you can reach is kept apart from the total on the Accounts and net worth page. And the cost of a balance that sleeps — $56 over twelve months for $1,840 at 0.05% — is shown on the Savings and goals page.
Where the figures come from
The maths in this article starts from the assumptions written above. Run them again with your own figures — you should land on the same numbers.
Yoseri News is an educational publication. Nothing in this article is investment advice, a recommendation to buy or sell, or tax advice. Yoseri is registered as neither an adviser nor a dealer with any market authority.