How much liquidity is considered too much liquidity?

I actually have a good answer to this. Depends largely on age as well but for most people who are within the front part of their earning life.

It should not be more than max 6 months of your monthly committed expenses. the rest of your money should be “working” for you

Monthly committed expenses:

• rent
• insurance premiums
• utility
• necessities for family etc

Hello!

There is no specific answer for this as it would likely depend on every individual. The problem with too much liquidity would be that it serves to distort financial markets and misallocates capital.
Ultimately, the right level of liquidity comes down to personal time preference for investors, financial objectives and reality for businesses, and the supply and demand for loans for central bank policy

Hope this helps !