House rich (asset rich), cash poor? What should you do?

House (asset) rich, cash poor is a product of you putting most of your wealth (equity) in real estate that's difficult to convert into cash.

Investing in real estate is a good financial decision but it may constitute a problem if you don't have sufficient liquid cash in the pocket and bank to maintain your lifestyle and, pay short term debts as they mature.

Being house rich, cash poor is an uncomfortable position where the struggle to hold onto real estate would cause you to keep on postponing, enjoying the benefits of being a homeowner.

To solve this problem, you striking a balance between your real estate asset and your liquid assets (top among them is cash) is necessary. This stability would translate into having sufficient funds in your savings or checking accounts to settle current liabilities as they fall due.

Apart from cash, other highly liquid assets are stocks and bonds, but it's more complicated to convert them into cash.

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