Why Liquidity Matters

Hi, Tom here.

Thank you for the awesome response to last week’s edition. Appreciate you all.

Quick reminder: next week’s Wealth Workshop is on. I’ve got 25 high-impact questions ready on retirement income, investing, estate planning, and more. If you’re nearing the end of your working years, join us—and put your wealth to work.

Sign up here.

This week, we’re talking about something even more fundamental than markets or taxes: cash flow.

Let’s get into it.

“The bond market will crack.”

That’s what Jamie Dimon said last week at the Reagan National Economic Forum.

If you don’t know Dimon, you probably have a credit card or checking account with him. He’s been the CEO of JPMorgan Chase for over 20 years. He sees the financial system—and the American consumer—more clearly than almost anyone else. So when he talks, I listen.

We’ve covered the national debt issue recently, so let’s skip that, but the second half of his quote is the one to focus on now:

“...the ability of market makers to make markets.”

If market makers can’t function, asset prices fall. Buyers disappear—and suddenly your net worth becomes temporarily theoretical.

Translation: your liquidity matters.

Liquidity is your ability to convert your assets, your time, or your talents into usable value.

When you are liquid—you feel wealthy.

When you are not—you feel tight.

It’s that simple.

Wealth isn't just about what you have—it's about how easily you can use it.

This matters for institutions like JPMorgan, and it matters for you.

Take Chipotle. Last week I wrote about how the average store generates $3 million in annual revenue at 20% margins.

Let’s say management wants to open 40 more stores across Texas—each costing about $1.3 million. That’s a $52 million expansion plan.

They could fund it entirely with cash. But more likely, they’ll put up $10 million of their own capital and borrow the rest—say, $42 million at 6.25% interest.

With strong margins, the math works. The stores generate $120 million in new revenue and about $24 million in profit. Chipotle will easily out-earn the cost of capital.

But cut those margins in half? Suddenly, bankers get nervous. The cushion is thinner. The risk is higher. The deal slows, stalls, maybe dies.

Same company. Same ambition. Different liquidity profile.

That same math applies to you—especially if your retirement plan relies on illiquid assets, unpredictable cash flow, or rising expenses.

This isn’t theoretical.

Here’s a real-world example:

This is what current home listings in Punta Gorda, Florida look like. My three year old son, Bode, would have no problem telling me there’s a lot of red there. Sellers in this community are trying to turn real estate into liquid capital (cash). But waves of new listings are hitting the market, causing it to be one of the fast growing inventory markets in the country.

And when the market gets saturated with supply, there are only two options: cut the price to find a buyer, or wait it out.

Either way, your outcome is dictated by the market—not your terms.

Waiting costs money. Price cuts cost money. Either way, that directly impacts a person’s financial life.

The issue gets magnified when more market participants need liquidity, as we are seeing here in Punta Gorda.

Everyone is trying to get out before the bottom falls out.

Liquidity is what keeps you from being forced to act under pressure.

It lets you hold. Wait. Breathe.

When liquidity disappears, fire sales happen. That’s when good people are forced to tough financial decisions.

And the people who have liquidity, scoop up great deals on good assets.

This scenario is what Jamie Dimon is warning about. If market makers lose their ability to make markets, then liquidity in the system evaporates. And when liquidity evaporates, the people who didn’t prepare get starved for cash flow.

When liquidity dries up—whether it’s in public markets, real estate, or your own portfolio—there’s little time to adjust. The decisions you can make come from planning you’ve already done.

Liquidity is less about reacting in real time and more about preparing ahead of time.

If you want to stay in control, the work starts now.

So what do you do with all this?

This is not doom and gloom - sure there are nuances in the real estate market that are concerning and while Jamie Dimon is probably directionally right, this isn’t a reason to run for the hills.

This is about operating your financial life with wisdom.

Here’s what to do.

You thoughtfully have a conversation with your spouse, your advisors, and review your liquidity in the context of your retirement plan.

• Are you holding enough liquid to cover the next 6-12 months of spending?

• Is your asset allocation designed to give you flexibility—not just growth?

• Are you counting on illiquid assets to fund short-term needs?

Then move deeper:

• If real estate plays a major role in your wealth, how easily could you pivot if prices fall?

• Are you exposed to large-illiquid private investments, large RMDs, or single-stock concentration?

• Have you modeled out scenarios where rates stay high or taxes increase?

There aren’t the easiest conversations to have, but they are important. And the timing of this edition is not by accident. We just are coming off an epic rally in the market which has opened the door for all us to do some proactive financial planning.

And it’s the summer.

Summer is a natural checkpoint. Work slows down. Travel increases. Family gathers. And in those quieter moments, you have space to ask big questions:

• What am I working toward?

• Is my financial life aligned with what matters most?

• Am I operating from strength or stress?

Run a personal liquidity stress test. Assume volatile markets, higher taxes, and an unexpected large expense. Could your plan still perform?

Summer gives you the space to reflect on the things no checklist, article, or market chart can show you—the instincts and insights buried in your memory bank.

This exercise is about your freedom.

That’s what we’re building at Fjell. That’s why we exist.

So take the time this summer. Look at your plan and look at your liquidity.

Jamie Dimon said if the markets crack, JPMorgan will do just fine. “We make money in times of trouble,” he said.

Good for them. But you’re not a bank. Neither am I.

We don’t profit in a crisis. We survive it—or we suffer.

And my wish for all of you would be summed up in this quote from the legendary investor, Shelby Davis:

That’s why you plan. That’s why you build margin. That’s why liquidity matters.

If you haven’t looked at your numbers lately—I mean really looked—this is your window.

Not because something is about to break. But because if it does, you’ll be ready to make the right moves.

That’s the edge liquidity gives you.

Two ways you can strengthen your foundation—and plan with purpose

• BluePrint — Our flat-fee financial planning engagement. Designed for individuals and couples who want expert guidance without a long-term commitment. We’ll help you clarify goals, assess risk, and map a plan to retire on your terms. If you’re looking for high-impact financial advice—fast—this is the place to start. Let’s start with a quick conversation.

• Bergen — Our flagship wealth management offering for those with $1M+ in investable assets. We work with financially successful families navigating retirement, transitions, and legacy decisions. More than portfolio management, Bergen helps you reduce complexity, optimize income, minimize tax drag, and align your wealth with what matters most—your values, family, and goals.. Let’s have a conversation.

According to the surveys we run with new readers, 1 in 3 people who already have an advisor are exploring other options.

If you’re feeling unsure—or wondering what a better plan could look like—we’re here to help.

Let’s talk.
Tom

PS. Join next week’s Wealth Workshop. It’s free. It’s real. And it’s built for people who want to own their future.

Bring your questions. Bring your situation. We’ll bring clarity.