67

Liquidity is about how easily something can be converted to cash not how much of it is circulating. So dollars (or other plausible currencies) are by definition the most liquid possible asset. There are plenty of relatively illiquid assets whose total value exceeds the amount of physical dollars in circulation. The total value of all real estate in the ...


35

Most "billionaires" have their wealth in companies that they grew into multi-billion dollar entities that they own a significant portion of. If the government then says "you own too much - you must give us 6% of what you own", then they likely don't have enough liquid assets (cash) to pay that bill, so they will be forced to sell shares of that company (or ...


31

If it were me, I would convert it to cash and keep it in a liquid account. The assumption that silver will increase in value is misguided. From 1985 to 2002, it was flat. It's gone up and been far more volatile since then, and there has been significant declines which could eat at the stability of an emergency fund. Precious metals are speculation, not ...


29

Firstly well done on building a really sold base of savings. An emergency fund needs to have two key characteristics: Be enough to get you through a typical emergency event (often seen as approx. ~6 months’ salary in your style of situation assuming you have no dependents etc) Be liquid and available to you instantly if an emergency arises Once you have ...


13

If you aggressively pay off the debt, how would you handle the emergency? When I talk to someone who is proud to build the 6 month buffer, but is still floating 18% credit card debt, I observe that they are worse off for the fact that they are earning close to zero in their emergency fund, while paying 18% on the debt. They'd be better off sending it all ...


13

If you were asking if you should buy silver for an emergency fund, I'd say no. But, you already have it... Note: I wrote most of the below under the assumption that this is silver bullion coins/bars; it didn't occur to me till the end that it could be jewelry. Both of you have good arguments for your points of view. Breaking it down: Her points 1. A ...


9

People normally hold precious metals as a protection against the whole system going down: massive inflation, lawlessness, etc. If our whole government and financial system broke completely and we returned to a barter economy, then holding silver would likely turn out to be a good thing. However, precious metals are not very good hedges against individual ...


9

One issue which I don't see addressed in the answers so far is how to structure bank accounts to get the highest return possible. What you're describing sounds like a certificate of deposit (CD): 'ranging from 1% for 9 months to 2.3% for 5 years' There is a concept which was once more common called a CD Ladder, which still allows you to access your money,...


6

While I disagree with some of what Joe Taxpayer says in his answer, I will echo that you should carefully consider what you will do should an emergency arise while you are paying off the high interest debt, without an emergency fund to absorb such costs. From a pure net-worth and ROI perspective, paying off high-interest unstructured debt is always ...


5

Full disclosure: I’m an intern for EquityZen, so I’m familiar with this space but can speak with the most accuracy about EquityZen. Observations about other players in the space are my own. The employee liquidity landscape is evolving. EquityZen and Equidate help shareholders (employees, ex-employees, etc.) in private companies get liquidity for shares they ...


5

"What if everyone decided to sell all the shares at a given moment, let's say when the stock is trading at $40? I imagine supply would outweigh demand and the stock would fall." Yes this is the case. Every large "Sell" order results in price going down and every large "Buy" order results in price going up. Hence typically when large orders are being ...


5

Depends on how you measure liquidity. There's papers out there that approach this very question. Measured in order book spreads for a consolidated $100m trade, I'd say the second biggest market is FX swaps, followed or par'd by the money market (government bonds). If you disallow OTC venues, it's most definitely exchange listed government bonds. If, ...


5

The "net" in "net worth" is your worth after subtracting off all debt. So, no, you can't count available unused credit in your net worth — liquid or otherwise.


4

With that high of an interest rate, I would say to only do an mini-emergency fund of 500-1000 dollars and then work on getting that paid off as quickly as possible. Or, depending on what kind of debt it is, look at transferring it to something with a lower interest rate, if you can.


4

I don't see why it would be any harder to sell stocks or bonds than it is to sell a CD you may have. Not to mention for large one time expenditures you can usually cover these with a credit card. This gives you about a month to move money around to pay your credit card off in a timely manner without incurring a charge. I have had no problem getting a ...


4

What if everyone decided to sell all the shares at a given moment, let's say when the stock is trading at $40? It would fall to the lowest bid price, which could be $0.01 if someone had that bid in place. Here is an example which I happened to find online: Notice there are orders to buy at half the market price and lower... probably all the way down to ...


4

Stuff I wish I had known, based on having done the following: Obtained employment at a startup that grants Incentive Stock Options (ISOs); Early-exercised a portion of my options when fair market value was very close to my strike price to minimize AMT; made a section 83b) election and paid my AMT up front for that tax year. All this (the exercise and the ...


4

In an exchange traded REIT, the only requirement to sell your shares is that someone else stands ready to buy your shares. One of the ways you can guage the available buyers and sellers is to check the daily volume. This site suggests that as of this writing, the volume is about well above 80,000 shares traded today. https://www.nasdaq.com/symbol/gov It ...


4

Well that would be relative to what you are looking to trade. If you were looking to trade say 1000 share of a company and the average daily volume was 50000, you might consider this stock is liquid enough for you to get in and get out without you moving the price much. But if you were looking to trade say 30000 of the same stock, then you would be trading ...


4

It seems reasonable just to pay off the mortage now --- have I missed anything? In your situation, paying off the mortgage now seems like a fine idea, it's not going to save you much in interest but it will be nice to have it taken care of. Living mortgage free may even feel so nice that you decide to alter your new house timeline. Given our goal, what ...


3

You can infer some of the answers to your questions from the BATS exchange's market data page and its associated help page. (I'm pretty sure a page like this exists on each stock exchange's website; BATS just happens to be the one I'm used to looking at.) The Matched Volume section refers to all trades on a given date that took place on "lit" exchanges; ...


3

That's like a car dealer advertising their "huge access" to Chevrolet. All brokers utilize dark pools nowadays, either their own or one belonging to a larger financial institution. Why? Because that's a primary source of broker income. Example: Retail investor 'Mom' sends a market order to F*TRADE to sell 100 AAPL at the highest price currently ...


3

The question appears simple, Should I prioritize paying down my higher interest debt over building an emergency fund, or vice-versa? And the details provided are minimal, I have a debt of $15,000 at a yearly interest rate of 9%, which can be paid within 5 years. No further information is provided regarding income and expenses, assets and ...


3

The "illusion" is the assumption that these vicious cycles can't happen, that liquidity is guaranteed by the large number and sophistication of market participants. They are warning people who focus on the current high level of liquidity that it could disappear suddenly if conditions change.


3

This is complementary to @Justin Cave answer to explain why US Treasury bonds are bought by many countries. Cash is a convenient medium of trade for the local economy, but it is a bad trade medium for a large amount of international trade. Just take the $100 billions value of oil example, if an oil export country takes the $100 billions US dollar home, ...


2

Volume @ 0 doesn't mean that there are no buyers and sellers, it just means that there hasn't been any trades done yet. What you need to look for are the bids and offers (for selling and buying, respectively). For further expiration and NTM or IT options there will almost always be a bid and an offer (but it may be very wide). Now, in case where there is 0 ...


2

You would need to check with Bank as it varies from Bank to Bank. You can break the FD's. Generally you don't loose the interest you have earned for 1 years, however the rate of interest will be reduced. i.e. if the rate was 7% for 1 year FD and 8% for 2 years FD, when you break after a year you will get only 7%. Generally this can happen in few hours but ...


2

The liquidity is quite bad. I have seen open Intrest drop from thousands to zero. Theta and the lack of liquidity are strong reasons not to buy options. Instead, consider selling them. They say that most Option purchases expire worthless. Why is this so? Because hedge funds buy those out-of-the-money puts in case their position goes against them (like ...


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