hey guys, so in doing all these past mocks it seems really likely that we’ll see Liquidity and Tiime Horizon. Time Horizon is fairly straight forward, but I seem to find myself questioning Liquidity at times.
I seem to be getting messed up in regards to this income offsetting expenses idea. so if the guy has 100k income and only 60k in expenses, he has no liquidity need to cover the 60k obviously. now, if he wants to contribute 10k a year to say, a muesuem or something, is that consider a liquidity need?? because he still has excess income to cover that… does it matter if it’s a one time 10k donation vs. an ongoing annual thing?
also just other questions…
Is it just liquidity needs that are within 1 year? If the dude needs 100k to fund something in 5 years, that’s not a liq requirement correct? Only when he needs 1MM to lump sum pay off a mortage at the end of the year?
are management fees included? if we have a 0.5% mgmt fee we list that correct?
living expenses if retired. so we have a 3MM portfolio, and we retire - so no income - then are our 150k annual living expenses considered liquidity needs? I would think so, but I’d just love to get some verification on some of these questions.