What is a liquid asset?
A liquid asset is an asset that can easily be converted into cash without a negative impact on its value. Examples of liquid assets are: cash itself, money in a savings account and investments such as stocks, bonds, mutual funds or money market funds.
Where have you heard about liquid assets?
You will have heard about liquid assets if you've ever spoken with a financial adviser. Many recommend that everyone keeps enough of their assets in liquid form to live on for 3-6 months. This is in case of an emergency, such as losing your job.
What you need to know about liquid assets.
Examples of things that aren't liquid assets include things like real estate, eg your house. Real estate isn't a liquid asset because it can take a long time for the seller to receive the funds from the sale.
Another example of a non-liquid asset is ownership of a company. This is because selling a company can have a negative impact on its value.
Find out more about liquid assets.
Read more about assets, liquidity and liquid market.