Bill has 5,099 euro in a current account earning nothing. He has been meaning to do something about this since February 2025, when EP.11 identified the opportunity cost of doing nothing and he told himself he would research the options that weekend.
Thirteen months have passed. The money is still in the current account.
He sits down in March and forces the decision. He draws a line: 3,000 euro moves into an index fund. The remaining 2,099 euro stays liquid, available within 24 hours for any emergency.
Liquidity position analysis distinguishes between assets by their time to conversion. Cash is perfectly liquid. A current account is liquid. An investment fund typically requires two to five business days to liquidate. The analysis asks not just what you own but how quickly you can access it when you need it.
Bill's current liquidity position is strong but inefficient. He holds 5,099 euro at zero return when his liquidity requirement, defined as three months of outflows at 1,215, is approximately 3,645 euro. Everything above that threshold is excess liquidity that carries an opportunity cost.
The thirteen months of inaction cost him approximately 196 euro in foregone returns.
He opens an index fund account. He transfers 3,000 euro. He leaves 2,099 in the current account. He does it on a Tuesday, not a weekend.
The tip
Define your minimum liquidity requirement before deciding how much to invest. Three months of fixed outflows is a reasonable floor. Everything above it is excess liquidity with a cost you may not be seeing.
Liquidity position analysis, March 2026: total cash 5,099. Minimum liquidity requirement: 3,645. Invested: 3,000. Remaining cash: 2,099. Opportunity cost of 13 months inaction: approximately 196 euro.
Bill is 25. Every episode, we read his personal ledger through accounting eyes. / FY 2026 ledger