How can you be “rich” but not liquid?

Question

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

Answer 1

If you have $10 billion in a trust fund that pays you $25,000 a year, you are rich but not liquid. Your net personal worth is $10 billion, but you are only receiving $25,000 a year, and are unable to actually use that $10 billion dollars to buy anything