Ask yourself how much of your money you could convert to cash within a month.
Then consider what withdrawal penalties, fees or service charges you would be required to pay to access your money. Or to get cash, would you need to sell an asset (such as in real estate?).
I talk with folks every day who have limited access to their money.
And they haven't been doing anything "wrong." They've simply been listening to the common advice to put their money in financial vehicles, such as a 401(k) or certificate of deposit (CD), that have many restrictions on access, not to mention taxes and penalties upon withdrawal.
Being able to convert your financial reserves to cash is a critical factor in being able to withstand a financial crisis, a job loss, change in health or family emergency.
Unfortunately, when these types of crises occur, lending institutions will typically not loan you money. Even the equity in your house many not be available to you.
When you need cash (and regular cash flow), it's not a good time to realize that you don't have easy access to funds without penalty or tax.
When I work with clients, we take an inventory of all their assets, including stocks, bonds, their home value and equity, business assets, employment benefits (including life and disability insurance) and anything else they own or could access as a financial resource.
Then we estimate what it would cost and how long it would take to turn their assets into cash. I use this information to develop a lifelong financial plan that helps them be protected and have ready access to cash should they be faced with a life crisis.
You can create a financial strategy that will empower you and enable you to weather life's crises. It's easy to plan when we work together.