Financial Independence: Low Capital & High Income

Financial Independence: Low Capital High Income

Conservative, Moderate, Aggresive

A client in this position finds themselves with an income stream that generates excess cash above their basic living requirements. We often find clients that fall into this category with some type of savings in the form of a short term savings accounts, a 401k Plan, ESOP, house equity or some other form of investment. These clients often cover the full range of our society. A few examples in the category are working professionals, company executives, small business owners or part of a wealthy family.

The client has just crossed over into our definition of basic financial independence. They have accumulated enough that with a reallocation of their capital base they could cover their basic life needs and not have to be reliant on their income stream. However, the current capital base would not be able to deliver the desired lifestyle.

From our prospective the client has to make a choice around their current capital base. We have found that there are three broad avenues to choose from.

• Conservative
  Preserve the capital base which covers Basic Financial Independence. Allocate Income beyond current lifestyle consumption to a conservative strategy with the goal of the entire capital base supporting the lifestyle over the long term.
• Moderate
  Preserve capital base which covers Basic Financial Independence. Allocate Income beyond current lifestyle consumption to aggressive growth strategy with the goal of growing capital base to support lifestyle in long term.
• Aggressive
  Allocate clients full capital base to a long term aggressive strategy which will achieve a capital base which will achieve the lifestyle support the quickest.