Liquid Assets
Definition:
Liquid Assets are those assets that can be converted into cash in a short period of time. Therefore these are also called quick assets.
Examples of liquid asset:
- Mutual funds
- Savings account in a bank
- Fixed deposit receipts
- Provident fund
- Gold
Benefits of Investing in Liquid Assets
The benefit from liquid assets appear quite simple, they offer greater liquidity. However, there are few more advantages that I have penned down for you.
These are:
- Lower risk
- Stronger financial profile
- Short term investment
- Quick access
Disadvantages of Investing in Liquid Asset
If there are some pros, there will be cons as well. The con of investing in liquid asset is that it gives limited returns.
Non Liquid Assets
Definition:
Non Liquid Assets are those assets that cannot be converted into cash quickly. They cannot be easily sold or bought.
Examples of Non Liquid Assets:
- Flat or apartment
- Land
Advantages of Investing in Non Liquid Assets
- Low cost of monitoring and management
- Fixed asset allocation
- Higher claim to asset
- Steady income
Disadvantages of Investing in Non Liquid Assets
- Constant depreciation (excluding landed property)
