Glossary
Liquidity
How quickly an asset can become cash without losing value.
Cash is perfectly liquid. Listed shares are highly liquid. A rental property takes months. A stake in a private company can be effectively impossible to sell at any sensible price.
Illiquid assets often return more precisely because they are inconvenient. The danger is needing money at the exact moment your wealth is locked in something that takes six months to sell.
Where this matters
Rental Property
Real Estate
Buy property with borrowed money and let tenants repay the loan
- Capital
- $10k+
- First income
- Months
- Risk
- Ceiling
- Seven figures
Index Fund Investing
Investing
Own the whole market at minimal cost and let decades do the work
- Capital
- Under $500
- First income
- Years
- Risk
- Ceiling
- Six figures