Guest Post: Living off Capital

by Philip Brewer on 17 December 2009 2 comments

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.

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Shannon

huh thanks for this, I will definately check it out. I dont come from a wealthy family, however I am becoming more well off than my family. I never thought about living off of capital before. You have given me something new to learn!

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I recommend clicking over to the Simple Dollar and make sure you check out the comments section. It looks like there is some good discussions stirring.