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Liquid asset to net worth
This ratio provides an indication of a person's net worth in cash or cash equivalents. A minimum of 15% is considered prudent to meet short-term emergencies.
CW8888 : When one have more dependents to support; it is better to have N x 15%
Not sure how of us who are actively pursuing financial independence are cautious of this ratio?
I prefer the Liquidity Ratio --- have been maintaining at about 24 months' worth of expenses.
ReplyDeleteJust gotta remember to keep it separate from Warchest ....... otherwise wait too greedy, go ALL IN. Hahahaha!!!!
Think most financially prudent or savvy will have at least three to six months; but when we are older and have more dependents 12 to 24 months is better. Older can mean that it will take a long time to find an alternate/replacement job.
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