How can you be “rich” but not liquid?

466 views

How can rich people drop all so much money on a daily basis but when they need larger amounts of money, they need to liquidate assets?

Yes, I know that wealth can come from owning assets outside of cash, but how can you spend hundreds of thousands of dollars a month if a their money and wealth is all tied up?

In: 1

12 Answers

Anonymous 0 Comments

Simply put, rich means having a high net worth. Net worth is total assets minus total liabilities. If your total assets are say $10mm and your total liabilities are $1mm, your net worth is $9mm, rich. But if the assets consist of real estate worth $9.95mm and $50k of cash your rich but illiquid. Real estate being an illiquid asset.

You are viewing 1 out of 12 answers, click here to view all answers.