Part 8/10:
Individuals who are asset rich but cash poor can also be caught off guard during a recession. They may possess significant wealth in properties or equipment, but lack liquid cash to manage day-to-day expenses or business operations.
During economic downturns, businesses might experience a drop in sales, leading owners to struggle with financial management. In these situations, having a cash reserve is invaluable. Liquidity is essential to weathering downturns successfully, allowing individuals or businesses to navigate financial challenges without having to liquidate valuable assets at a loss.