The Toasty Podcast Ep 11 | Liquid Capital w/ Maxwell Simmons
This is the story of Maxwell Simmons. (Kind of). Liquid capital and Net Worth misconceptions are really just his pet peeve so we decided to talk about it on the pod. I’m down to talk about whatever whenever so count me in.
People use Net Worth to describe how wealthy a person is, but in all actuality it doesn’t quite add up that way. Assets – Liabilities = Net Worth
So if you’re an American you’re more than likely in debt. Guess what brosky, you may not even have a net worth. Might even be negative for all we know because of the debt. That includes your mortgage too!
Liquid Capital means anything you could sell to in turn have cash a.k.a liquid cash. Stocks are considered a liquid asset because you can sell them and have cash, even though the process is technically three days from the time of selling the stock.
I think Max goes a little more in depth, but why don’t you listen for yourself!
Max’s Instagram @maxwell.e30 | Instagram: @therealskyeday | Twitter: @toastyskye | Email: skye.tday@gmail.com | BluBrry Podcast Hosting | Excerpt from my article on Asset Definition:
[powerpress]
“So you have the limited edition Nike’s just chillin in the closet waiting for the day they can shine and it turns out they’re worth something. That’s an asset.
You bought a house 5 years ago and the interest is finally getting paid off enough that you make a dent on the actual principle of the home? Now that’s BECOMING an asset. Not there yet…but it’ll get there if you do it right. Especially if the value of the home is already growing over what you paid for it (including interest).
Cool. So now I know what you’re thinking. Your head’s spinning. “WOW. I can sell my old baseball cards, my collection of bobbleheads, that famous porno my mom gave me”
Wait.
What.
Ok Ok. Maybe I shouldn’t have used the shoe analogy, but did you learn something and did you get the point?
Maybe. And that’s good enough for me.
So let’s get to the point point.
The assets chosen in a 401(k) or IRA are actually up to you to some extent. For instance you can find a fund that actually has Domestic and International stocks as well as bonds and REITs among other types of securities. This is why banks created “Target Date Funds”. These funds will change the balance of the portfolio in order to meet your needs as you age. Often times this doesn’t seem to look that good on paper though…I haven’t made it to the “2050-Target Date” yet though so honestly I really don’t know.
To compare you could look at target date funds created for people retiring now. Then look at the past performance of that specific fund. What you’ll find are a number of funds, not limited to target date funds, change managers at least once during the time frame given.
It’d be kinda like investing in a company that decides to change the CEO. This year alone (2019) there’s been over 100 CEO changes amongst the companies traded publicly on the NYSE. What a time to be alive…or something like that.”
MORE INVESTING CONTENT CAN BE FOUND HERE.
