Glossary

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Non-Liquid Asset
Non liquid assets are assets that cannot be sold or converted into cash easily without a significant loss of investment. Some examples of such assets include houses, cars, land, televisions and jewelry. For example, if an individual goes to get a loan from a bank, the bank will consider his or her current assets before the bank deciding whether or not the individual should receive a loan. If one of the individual's current assets is a car for $23,000, the amount he or she paid for it, the actual value if the car was to be sold would be significantly lower; the bank, however, would use the $23,000 value rather than what it is currently worth. This is because as the economy changes, the value of the car can rise or fall, making it much more difficult for the bank to calculate its current monetary value, so they simply use the original purchase value.