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Financial Terms Everyone Should Know – Liquidity

Liquidity is simply how easily any asset can be turned into cash. Some assets are easier to convert into cash for a needed purchase or emergency than others. For example, a mutual fund is easier to liquidate than a car, and a car is easier to liquidate than a house.

Lenders will often compute a liquidity ratio of your finances in addition to your income to determine your ability to pay off a debt before loaning you more money for something like a car or home.

Find Out More with MyMilitarySavings.com and Finance!

Charlie Marlow

With over 22 years of active-duty Air Force experience in military pay and travel entitlements, Charlie Marlow brings his extensive knowledge of military finance with his passion to help others reach their financial goals through common sense financial practices. Charlie holds a BS in Business Finance from Liberty University, is an Accredited Financial Counselor®, a Dave Ramsey trained Financial Coach, and co-founder, administrator, and frequent contributor to the Facebook group Military Money Matters. He still supports the Air Force and DoD as a contractor budget analyst at the Pentagon. When not writing or helping others create a personal financial plan, you can find him cycling around the National Capitol Region or enjoying classic TV shows.

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