Liquidity Questions

client is retired, drawing $100k/year from portfolio. How do you complete the liquidity section? A. Sufficient liquidity must be mainted to cover living expenses B. Should keep $100k in cash to cover one year of living expense also question one time expenses: if there is a large one time expense (i.e. car purchase of $30k) in 2 years should that be kept in cash? 3 years? I remember reading that < or = to 3 yrs is ST. I assume one year the answer is yes. Any comments appreciated.

liquidity: the family requires $100k annually to cover expenses and an adequate cash reserve should be maintained to fund emergencies. i stop liquidity at t=1. so a car in 2 years i wouldn’t. A house in 2 years (large purchase) i might mention. Depends on how mucht he purchase makes up of their asset base. But generally i stop the liquidity constraint at t=1

Striker, what is where you are smarter than me. You can count, however, I can’t.

huh? haha.

strikershank Wrote: ------------------------------------------------------- > liquidity: the family requires $100k annually to > cover expenses and an adequate cash reserve should > be maintained to fund emergencies. > > > i stop liquidity at t=1. so a car in 2 years i > wouldn’t. A house in 2 years (large purchase) i > might mention. Depends on how mucht he purchase > makes up of their asset base. But generally i stop > the liquidity constraint at t=1 same here liquidity stops at year 1. I guess the reasoning is that they will review IPS in a year and determine liquidity again…