Personal Finance

Emergency Liquidity

Definition

What is Emergency Liquidity?

Cash or liquid assets available to meet urgent needs without selling long-term investments at a bad time.

Example in practice

A medical bill is paid from cash reserves rather than by selling shares during a market fall.

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Money set aside rather than spent, often for emergencies or future goals.

Liquid savings reserved for unexpected expenses or income disruption.

Total assets minus total liabilities.

Annual portfolio withdrawals divided by the portfolio's starting or current value.

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