What Assets are Considered Investable Assets?

Your net worth is a good way to determine how much value you hold, but investable assets might be a better measure. Knowing this can offer a much more complete picture of what kind of value you hold between all areas of your financial life. How you manage investable assets will determine your financial future.

A financial advisor can help you develop a strategy that fits your budget and long-term goals.

What Are Investable Assets?

Investable assets include your liquid and near-liquid assets. This can include:

Cash, checking, and savings accounts
CDs and money market accounts
Stocks, bonds and mutual funds
Retirement accounts and trusts

Properties and physical assets like your home, vehicles, other real estate investment properties and art, jewelry, or collectibles aren’t considered liquid or near-liquid.

Investable assets are what you have when you don’t sell your possessions or properties. They’re an important wealth indicator for financial advisors and lenders for different reasons. They can be a helpful guide to understanding how much you can financially cover in case you need cash fast, too.

Why Do Investable Assets Matter?

Financial advisors will want to know about your investable assets so they can better understand what they can use to invest on your behalf. It’ll help you figure out how much money to put toward your investments. Cash and money in your bank accounts can easily convert to investable assets. This means the more money you have on hand, the more you can use to invest.

Banks and credit lenders also look at your financial assets to see if you’re a good candidate to take on new debt, like a mortgage or personal loan. The more investable assets you have, the more likely you are to continue paying your debt in the event of a financial emergency.

How Do You Calculate Investable Assets?

Since your investable assets only include liquid and near-liquid assets, you’ll start there. Add them all up, then subtract any debt you owe. Avoid adding in your mortgage, if you have one. This is usually considered an “expense” and not a debt.

The difference in calculating your investable assets versus your net worth is that your net worth fluctuates based on the market values of your physical assets. In comparison, investable assets aren’t based on your physical assets. While they do fluctuate based on market conditions and how much debt you owe, they won’t see as much change.

If you’re in the market for a new home or you’re looking to hire a financial advisor, consider calculating your investable assets first. This can give you an idea of your worth and can help you understand how to handle investments going forward. Some brokerage firms have a minimum amount required to start investing. Making sure you know your investable assets can help you determine if a certain firm is right for you.

Assets That Typically Are Not Considered Investable

A couple reviewing their investable assets.

Assets that are typically not considered investable share one defining trait: they cannot be easily converted into cash or deployed into a traditional investment portfolio without significant friction. Even when these assets have substantial market value, their lack of liquidity limits their usefulness for investing, rebalancing or meeting short-term financial needs.

Primary residences and personal-use property fall into this category. A home, car, or vacation property may represent a large portion of a household’s net worth, but selling these assets is time-consuming, costly and often impractical. Because they are tied to everyday living needs, they are not generally treated as capital that can be readily invested.

Closely held business interests are another common exclusion. While a privately-owned business may be extremely valuable on paper, accessing that value often requires selling equity, bringing in partners, or finding a buyer. Until such a transaction occurs, the value remains illiquid and typically outside the scope of investable assets.

Assets such as artwork, jewelry, rare coins, or memorabilia are also usually excluded. These collectibles depend heavily on specialized markets and buyer demand, and their values can vary widely. The uncertainty around pricing and liquidity makes them unreliable as a foundation for an investment strategy.

When calculating investable assets, these categories are excluded so the total reflects only capital that can realistically be allocated to securities, cash-based holdings or other liquid investments.

Managing Your Investable Assets

Consider updating your investable asset calculations regularly, such as once a month or every quarter. This can help give you a clearer picture of how much capital you have available if you need to access cash quickly, without having to sell personal property such as your home or vehicle. According to the most recent Federal Reserve Survey of Consumer Finances, the median net worth for U.S. families in 2022 was $192,900.

The amount you hold in investable assets often depends on factors such as age, household size, cost of living, and income. One person may target $500,000 in investable assets, while another may aim for $50,000 based on different goals and obligations. Someone early in their career may prioritize building an emergency fund and modest investment balances, while someone further along may focus on growing retirement and brokerage accounts.

For example, a household might have $40,000 in a checking account, $120,000 in a brokerage account and $180,000 across retirement accounts, for a total of $340,000 in investable assets. Even if that same household owns a $450,000 home and two vehicles, those items would not be included in the investable asset total because they are not easily converted to cash for investing.

Looking at your portfolio this way helps separate lifestyle assets from capital that can be allocated to stocks, bonds, mutual funds, etc. This distinction can make it easier to set investment targets, assess risk exposure and decide how much money you can reasonably commit to long-term growth versus short-term needs.

Revisiting these numbers periodically also allows you to track progress and adjust contributions or allocations as your income, expenses and goals change.

Bottom Line

Investable assets are not only important to have, but important to track. Maintaining a certain level of investable assets can give you peace of mind that in the event of an emergency, you have enough money to cover your family and your bare minimum living requirements. Working with a financial advisor to set a realistic goal for your situation may be the best way to figure out how much you should have in investable assets.

Tips for Managing Your Money

If you’re in over your head on managing your investments, talk to a financial advisor. They can help simplify your expenses, understand where your income goes and give you ways to get your money to work for you. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
If you’re worried about your lack of investable assets, start with building an emergency fund. This is the best step to covering expenses in case of dire circumstances. Say you lose your job, are hospitalized or have another unexpected cost come up. An emergency fund can help you pay for those expenses without resorting to a personal loan or using your credit card. Start with three to six months worth of expenses covered in your emergency fund.