Season 5 Episode 3 Liquidity Planning: How to plan for short-term needs and where to invest

Liquidity Planning: How to Plan for Short-Term Needs and Where to Invest

Liquidity is important for everyone, no matter what phase of investing you are in. If you anticipate needing your money within the next five years, it should be readily accessible. The primary objective is to ensure the protection of your income stream and have assets at your disposal.

It’s impossible to grow your income, draw an income stream, and keep it liquid all in one portfolio.

In our 3-bucket approach, funds are distributed into 3 categories: liquid, income, and growth. Anything in the liquid bucket will not be available for growth or income.

There are two reasons someone may want to have liquid assets:

1. Emergency Fund: The recommended amount for an emergency fund may vary depending on your current investment phase.

2. Short-Term Expenses: These are expenses you anticipate in the next five years, such as buying a new car, funding house repairs or renovations, or taking trips.

The objective here is to safeguard this money from market risks. If your financial goals are within 1-3 years, there may be an alternative investment to consider besides a checking account. These could include cash alternatives such as CDs, money market accounts, fixed annuities, or specialty savings accounts. Most people think that having money liquid means it doesn’t earn anything. That is not the case with these alternatives.

Contact our team of professionals for more information about the current return on specific accounts that could benefit you.

816.246.WISE (9473) or

With our Simplify Your Retirement Plan® Process, your income stream will be guaranteed and the plan ultimately leads to financial peace of mind so you can live the retirement you always dreamed of.

Wise Wealth is an education-based financial planning firm that specializes in retirement.


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