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
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.
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