In finance, liquidity is defined as the ease with which an asset or security can be easily bought or sold. Cash is super liquid, your house is a brick, literally.
In life, liquidity is the ease with which you are able to live with freedom and autonomy over your person. A liquid person can leave their current situation at the drop of a hat. On the opposite end you are stuck, be it a job or any other situation you can come up with.
Life liquidity is the ability to live with freedom.
Google financial independence and you’ll see that is how most people these days define life liquidity, and for good reason. It’s the “F*ck off Fund” or the “Freedom Fund”. It’s the ability to quit a bad job, leave a toxic relationship, go back to school or move to Costa Rica for a year or a lifetime.
It’s all about the cash flow.
Having money in the bank (and wisely invested for your time horizon and goals) is one way to have financial independence, or rather, life liquidity, but it’s not the crux of the matter. What matters most is cash flow. Can you maintain a lifestyle acceptable to you and still do what you want, what matters most to you? Can you maintain this lifestyle for a week, a year, or a lifetime? Y
ou don’t always need a million dollars, or whatever your number is, in the bank to live life on your terms.
I don’t drive a Porsche, but I’ve had many years of self-funded quality time with my kids, as a single parent no less. That’s my life liquidity. What’s yours?
I’d love to hear from you, what your goals are, and where life liquidity would take you.