The Liquidity Pot

The Liquidity Pot is the part of your portfolio set aside for safety. It is there to help you cover unexpected expenses or short term needs, without having to sell your long term investments at the wrong time.

For most people, this means keeping aside around three to six months of living expenses in cash or low risk, accessible options. While this pot is not meant to generate high returns, it can still be managed thoughtfully so your cash works a little harder without taking on unnecessary risk.