Definition

An asset that can be quickly converted into cash without significantly affecting its value.

What to consider

  • Identify which of your assets can be quickly converted to cash.
  • Keep a healthy balance to cover emergencies.
  • Review your portfolio to ensure liquidity when needed.

Real world scenarios

  • Keeping a portion of her savings in liquid assets like cash and short-term investments allowed Zoe to cover emergencies without delay.

Related terms

Investments & Retirement