Liquid capital is an easily convertible asset, such as money. Liquid capital is the opposite of a long-term asset, such as real estate or a business.Know More
Also called fluid capital, liquid capital is cash, or something that can be converted into cash very quickly without a high impact to the amount of cash received. Examples of liquid capital possessed by most individuals include savings accounts, stocks and checking accounts, while liquid capital assets possessed by organizations and governments consist of stocks, money market instruments and government bonds.
For an asset to be considered liquid, it needs to have an established market that can absorb the sale of the asset without the price being negativity impacted. For example, if the selling of all of one person's or organization's apples would flood the market, resulting in the price of apples dropping noticeably, then apples cannot be considered a liquid asset.
The most liquid market in the world is the foreign exchange market because of the trillions of dollars exchanging hands every single day; this huge amount of material being exchanged means that one single individual cannot influence the market or its exchange rate.
Liquid capital is one-half of a person's or organization's net-worth; the other half being long-term assets and possessions.Learn more about Investing
A real estate capital gain is the profit made when selling a piece of real estate, reports the IRS. It is calculated by subtracting the basis, or amount originally paid, from the amount for which the property is sold.Full Answer >
Ordinary share capital refers to shares that are issued by a company that allow shareholders voting rights within a corporation. Ordinary shareholders may also receive dividends. Ordinary shares are also referred to as common stocks.Full Answer >
A person can increase capital gains by selling particular assets at an amount greater than the purchase price, notes the Internal Revenue Service. These assets must be held for at least one year prior to being sold on the open market.Full Answer >
Some ways that people earn money without working are through collecting interest or dividends from investments or by being the beneficiary of an inheritance. People may also earn money without working by receiving royalties, residuals or other passive income from work that was done in the past.Full Answer >