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Meaning & use

liquid money

noun·Advancedfinancebusiness

Last updated

UK/ˌlɪkwɪd ˈmʌni/
US/ˌlɪkwɪd ˈmʌni/

Meanings

  1. noununcountablefinancebusiness

    Money held in cash or in accounts you can withdraw immediately, rather than tied up in property or investments.

    Grammar: Uncountable, so no plural: say 'a lot of liquid money', not 'liquid moneys'.

    Patterns

    • hold liquid money
    • keep something as liquid money
    • turn assets into liquid money

    After selling the house, they kept most of the proceeds as liquid money in a savings account.

    Small firms often need liquid money on hand to pay wages and suppliers.

    He moved his savings into liquid money because he expected to buy a car soon.

  2. noununcountablefinancetechnical

    In economics, the part of the money supply that can be spent or transferred right away.

    Grammar: Used in technical writing about the money supply; often replaced by 'liquidity'.

    Patterns

    • the supply of liquid money
    • liquid money in the economy

    Central banks watch how much liquid money is circulating in the economy.

    When the supply of liquid money grows too fast, prices can rise.

Common combinations

hold liquid money
Investors who hold liquid money can react quickly to new opportunities.
liquid money in the bank
She keeps enough liquid money in the bank to cover six months of expenses.
turn assets into liquid money
They turned their assets into liquid money before moving abroad.
a shortage of liquid money
A shortage of liquid money forced the company to borrow short-term.
liquid money supply
Economists track the liquid money supply to predict inflation.

Synonyms and how they differ

cash
Refers only to notes and coins, while 'liquid money' also includes money in checking or savings accounts you can access at once.
liquidity
The technical term for the same idea; it can also describe how easily an asset can be sold, so it is broader than 'liquid money'.
ready money
An older, more informal phrase for cash you can use immediately; 'liquid money' is the finance register.

Opposites

illiquid assetstied-up capital

Word family

liquid adjective
Able to be turned into cash quickly, as in 'liquid assets'.
liquidity noun
The state of having cash or easily sold assets available.
liquidate verb
To sell something or close a business in order to get cash.

Commonly confused: liquid money or liquid asset? liquid money or cash flow?

liquid money vs liquid asset

A 'liquid asset' is the thing you own (shares, a savings account); 'liquid money' is the cash-like value itself, so the two overlap but are not identical.

liquid money vs cash flow

'Cash flow' is money moving in and out of a business over time, while 'liquid money' is the amount available at one moment.

Practice

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