Asset rich, cash poor – and what you can do about it
Tuesday, 24 February 2026
Martin Hawes is a financial writer and presenter, and has written 25 personal finance books. He writes a weekly column.
OPINION: I hear it often: people complaining that they are asset rich and cash poor. It is usually spoken in a plaintive voice, as if they had just been diagnosed with a disease.
But, far from being a disease, asset rich, cash poor is a choice. Unlike many diseases, it is curable – you can do something about this complaint.
Think about the first two words: “asset rich”. Being asset rich is actually a good thing – we all want to be rich in assets. Lots of assets is the very definition of wealth.
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When you boil it down, the problem with being asset rich and cash poor is that people have the wrong assets. Usually, those assets cannot easily be sold, give little or no income and are not divisible – you cannot sell a small part of them.
Mostly, people who say that they are asset rich, cash poor have one big, lumpy, illiquid asset: perhaps a big house or a farm. This is not usually too much of a problem for the young, but it can be a real problem for older people.
For older people it is the house which is usually the biggest culprit – too much house and not enough investments for income. People end up in retirement with a big house and very little else to fund the other things that they might want to do.
As an adviser, I found the big-house-and-not-much-else scenario quite common. Sometimes I was asked to advise because one of the partners had been widowed. An event like that, with less coming from NZ Super, made for decision time, with all options on the table.
Ultimately, of course, it is the clients’ money and the clients’ lives – advisers can only make sure that people know that there are choices and what the consequence of any choice may be.
The first option with a big house and not much more would obviously be home equity release – a reverse mortgage or home reversion. This is a way of using the house for income while staying in it.
However, sometimes the house was getting hard to maintain and selling it for a smaller town house or apartment was obvious and possibly necessary. This may not be as straightforward as it might seem: there would often be a strong emotional attachment to the house, with a reluctance to shift. Moreover, family visits to a big house made it home not just for the couple but for children and grandchildren.
In addition, the house may provide a good deal of recreation – a couple who have worked in and on the garden for decades and could not imagine life without it. These people would rather forgo other recreation, stick with the garden and continue being asset rich and cash poor.
It could be hard to get them to see other options even when it seemed straightforward: on the one hand, they can have the big house and live on NZ Super; on the other hand, a different house but some income for other things. People can have choices but, as they age, they often become wedded to their situation and are reluctant to make big changes.
The choices nearly always involve selling an asset and there can be strong attachments to things like houses and farms.
Asset rich and cash poor is really about asset allocation – the way that you allocate your wealth to various assets will determine what you do in retirement.
As they go into retirement, most want to have their wealth split between a house and some diversified, liquid investments which can easily be drawn on to provide income. There is no rule of thumb that gives the right proportion of how much of our money will be in a house and how much in an investment portfolio – we are all different in our wants and needs.
If you want to travel and spoil the grandchildren, you may need more in investments; if you want to stay home tending the garden, a greater percentage in the house may be appropriate.
You are fortunate if you have a nice balance between income from a portfolio and a good house. If you are less fortunate, you will have to compromise on either the house or the portfolio.
This will require you to think about what you want in retirement – a nice house or plenty of income to do things. Few of us make a conscious choice on this, but the way that you allocate your wealth may make a big difference to the quality of your retirement.