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Unveiling the Power of Liquid Net Worth: A Pathway to Financial Freedom

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Jul 7, 2023

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In the realm of personal finance, the concept of net worth often takes center stage. It serves as a barometer of one's financial well-being, reflecting the value of assets minus liabilities. While net worth is a critical metric, there is another dimension worth exploring—liquid net worth. In this article, we delve into the intricacies of liquid net worth, its significance, and how it can act as a gateway to financial freedom.

  • Understanding Liquid Net Worth:

Liquid net worth encompasses the financial resources readily available to an individual or household. Unlike traditional net worth, which considers all assets, liquid net worth focuses on the easily accessible and highly convertible assets. It encompasses cash, savings, investments, and other liquid assets that can be quickly turned into cash without significant loss of value.

  • The Significance of Liquid Net Worth:

Emergency Preparedness: Liquid net worth acts as a financial cushion during unexpected emergencies, such as medical expenses or sudden job loss. Having a robust liquid net worth ensures you can weather unforeseen storms without resorting to debt or selling long-term assets at a loss.

Investment Opportunities: A healthy liquid net worth empowers you to seize lucrative investment opportunities as they arise. Whether it's a promising business venture or a dip in the stock market, having readily available funds enables you to capitalize on favorable circumstances.

Flexibility and Peace of Mind: Liquid net worth provides a sense of financial security and flexibility. It affords you the freedom to make significant life choices, such as pursuing further education, changing careers, or embarking on new ventures, without being constrained by a lack of funds.

Debt Management: Maintaining a healthy liquid net worth can help manage debt effectively. By having accessible funds, you can pay off high-interest debts, thereby reducing financial burdens and freeing up resources for wealth-building activities.

  • Building and Optimizing Liquid Net Worth:

  • Establish an Emergency Fund: Start by building an emergency fund that covers at least three to six months of living expenses. This fund acts as a safety net during unexpected circumstances.

  • Strategic Savings: Allocate a portion of your income towards savings regularly. Consider automating savings contributions to ensure consistency. Optimize your savings by utilizing high-yield savings accounts or investment vehicles that offer both liquidity and growth potential.

  • Diversify Investments: Balancing your investments between liquid assets, such as stocks and bonds, and long-term assets like real estate or retirement accounts can enhance your liquid net worth while maintaining overall financial stability.

  • Minimize High-Interest Debt: Prioritize paying down high-interest debts, such as credit card balances or personal loans. By reducing your debt burden, you can allocate more resources towards bolstering your liquid net worth.

In the journey towards financial independence, liquid net worth emerges as a crucial aspect that goes beyond the traditional notion of net worth. By understanding its significance and implementing strategies to build and optimize it, individuals can unlock newfound financial freedom. Embrace the power of liquid net worth and pave the way towards a more secure and prosperous future.

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1. Qualified applicants may borrow up to 95% of their home’s value. This does not apply to investment properties.2. HELOCs have a 10-year draw period. During the draw period, the borrower is required to make monthly minimum payments, which will equal the greater of (a) $100; or (b) the total of all accrued finance charges and other charges for the monthly billing cycle. During the draw period, the monthly minimum payments may not reduce the outstanding principal balance. During the repayment period, the borrower is required to make monthly minimum payments, which will equal the greater of (a) $100; or (b) 1/240th of the outstanding balance at the end of the draw period, plus all accrued finance charges and other fees, charges, and costs.The lender will calculate this amount by taking the outstanding Account Balance on the last day of the draw period and dividing it by 240 months and then adding any finance charge that accrues but remains unpaid during the monthly billing cycle plus any other fees, charges and costs to the fixed principal payment that is due. During the repayment period, the monthly minimum payments may not, to the extent permitted by law, fully repay the principal balance outstanding on the HELOC. At the end of the repayment period, the borrower must pay any remaining outstanding balance in one full payment.3. The time it takes to get cash is measured from the time the Lending Partner receives all documents requested from the applicant and assumes the applicant’s stated income, property and title information provided in the loan application matches the requested documents and any supporting information. Most borrowers get their cash on average in 21 days. The time period calculation to get cash is based on the first 4 months of 2024 loan funding's, assumes the funds are wired, excludes weekends, and excludes the government-mandated disclosure waiting period. The amount of time it takes to get cash will vary depending on the applicant’s respective financial circumstances and the Lending Partner’s current volume of applications. Closing costs can vary from 3.0 - 5.0%. An appraisal may be required to be completed on the property in some instances.4. Not all borrowers will meet the requirements necessary to qualify. Rates and terms are subject to change based on market conditions and borrower eligibility. This offer is subject to verification of borrower qualifications, property evaluations, income verification and credit approval. This is not a commitment to lend.5. The content provided is presented for information purposes only. This is not a The content provided is presented for information purposes only. This is not a commitment to lend or extend credit. Information and/or dates are subject to change without notice. All loans are subject to credit approval. Other restrictions may apply.