Liquid assets are assets that can be converted into cold hard cash quickly and without any significant penalty. By this it means that if you were to take your mutual funds and convert them to cash it would take a day or two tops and you might face a small fee but overall it would mean you get most of the money from them. A house on the other hand might be a very significant asset but one that would take a while to sell and reap any potential cash from.
The reason for this post is I’m currently broke waiting for a bunch of money to clear whatever holds that are placed on it. It made me question the term liquid assets because I am dealing with items that are already considered cash yet I can’t access any of this money until everything clears. Its a frustrating situation to be in because I have virtually no money on hand and a significant amount just sitting in some banks accounts waiting for some magic approval to be placed into mine.
I am currently cash shy but I’m also not in a dire need to have the money right away. If I had an emergency on the other hand I would be in some serious trouble. My liquid assets are not nearly as liquid as I would like them to be. What baffles me the most is why it takes a full 5 days for a check to clear letting me access the funds. Whenever I write a check its out of my bank account within a matter of a day or two – not 5! Its a frustrating situation and its making me question why banks and financial institutions can hold money for so long.
Have any of you encountered situations where your money was held when there was no reason for it?