Capital

‘Capital’ is the third of the three pillars of financial freedom outlined by the authors of Your Money or Your Life Vicki Robin and Joe Dominguez.

It refers to the money you have invested to provide an income. This investment may be in assets like real estate or shares.

Once the income from your capital is sufficient to cover your expenses (after accounting for inflation and a safety margin), you have reached the ‘crossover point’, and the highest definition of ‘Financial Independence‘.

See also: Cache, Cushion

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