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What is the ratio of liquidity vs material wealth ...?
It's fluid. At various points in your life and for various reasons these numbers will move around.
Avoid looking for this sort of one single number type of solution. It isn't out there.
It's fluid. At various points in your life and for various reasons these numbers will move around.
Avoid looking for this sort of one single number type of solution. It isn't out there.
I can see what your saying in a way but I'm not sure if I understand you.
If I go out and buy a new Mercedes Benz there are liabilities that come with that. Cost of insurance, maintenance, repairs, taxes and fees. A 5000 sqft home is going to have more costs associated with it than a 500 sqft home.
There's no reliable rules for proportions in this that people use? I can pretty much think one up but I just wonder what other people do, what systems they use with in investing or whatever as opposed to liabilites they take on.
Never heard of the term "material wealth" but I think you're thinking of something similar to tangible assets that are used in a business. Of course I think about related expenses when purchasing things you describe as "material wealth" but there's really a risk and reward concept to everything you buy. If you buy stocks they're volatile and could drop a lot in the short term, but in the long run they usually provide a pretty good return. If you put your money in a savings account it's safe but you probably could have earned more investing in something else. For a house there are expenses but counter that with probable appreciation and a place to live. I don't think along your lines. Agree with others that there is no set percentage that I feel is the best when talking about different investments/assets as you describe them.
I pay no attention to a ratio. Based on your needs buy the assets you need. Based on your current expenses, expected future expenses, and emergency needs figure out your liquidity needs and the rest gets invested.
Lol interesting term I don’t think really exists much. I think people consider liquid versus illiquid assets. I’m about 98% invested in immovable assets and under 2% cash, which I consider to be an annoying situation but it is what it is. Invested for aggressive future gains. Aiming for 10% liquid by the time I hit 40. As for “material wealth,” I consider everything I buy to be immediately worthless to be honest with you. Whether it’s a collectible or a car or a TV or whatever else the second it arrives, I consider it to have no value beyond my enjoyment of it. That way I’m pleasantly surprised when I sell something and get 10-30% of its purchase price back but I don’t look at things as investments, just investments in my happiness. It keeps me not buying a bunch of useless stuff either. I’m more selective. I have driven my car for 7 years now and it hasn’t yet hit 10,000 miles, I’ll drive it for another 8 even if I can afford a really nice car because cars are a waste of money anyway so I’d rather not throw money down the tube on them until I’m so rich it doesn’t even matter lol. We have a primary car we drive more often and whatever our primary car has been, it’s always a money suck.
Lol interesting term I don’t think really exists much. I think people consider liquid versus illiquid assets. I’m about 98% invested in immovable assets and under 2% cash, which I consider to be an annoying situation but it is what it is. Invested for aggressive future gains. Aiming for 10% liquid by the time I hit 40. As for “material wealth,” I consider everything I buy to be immediately worthless to be honest with you. Whether it’s a collectible or a car or a TV or whatever else the second it arrives, I consider it to have no value beyond my enjoyment of it. That way I’m pleasantly surprised when I sell something and get 10-30% of its purchase price back but I don’t look at things as investments, just investments in my happiness. It keeps me not buying a bunch of useless stuff either. I’m more selective. I have driven my car for 7 years now and it hasn’t yet hit 10,000 miles, I’ll drive it for another 8 even if I can afford a really nice car because cars are a waste of money anyway so I’d rather not throw money down the tube on them until I’m so rich it doesn’t even matter lol. We have a primary car we drive more often and whatever our primary car has been, it’s always a money suck.
A nice car doesn't make me more money. In fact it costs me more.
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