Guest Post: Living off Capital
I have a guest post up on The Simple Dollar that talks about Living Off Capital.
People who come from wealthy families learn how to live off capital. The rules are taught along with all the other things they learn from their parents–how to dress, how to eat, how deal with bankers and trust officers. But even though most people don’t learn the rules, living off capital is just a skill, and it’s one that everybody should learn, because everybody lives off capital sometimes.
People usually think about living off capital in the context of retirement, but that’s just one (albeit important) example. Perfectly ordinary transitions, such as losing a job and having to find another, also amount to living off capital. There is also the broad swath in between: Living off capital for longer than just the length of time it takes you to run through your emergency fund, and doing so without the institutional support–social security, medicare, maybe even a pension–that comes along with retiring at an ordinary retirement age.
It goes on to talk about investing for income, reinvesting to preserve your capital, diversifying, and keeping your expenses flexible. If that sounds interesting, click on over to The Simple Dollar and check out Living Off Capital.