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Investible Surplus
Investible surplus is the sum of money remaining with you after you have met
all your expenses. An important element of financial planning, investible
surplus determines whether your goals can be realistically achieved.The point above is illustrated with the help of a graph of a
hypothetical customer. He has a fairly typical cash flow picture where he
generates a surplus for most of the years before retirement, followed by a
period of consumption.
One cause for concern is that most of his major expenses occur
after his retirement in 2021. The years where these expenses occur may result in
a net negative cash flow. However his strong financial situation places him in a
good position to be able to handle these expenses without any strain.
A financial plan would enable you to achieve your goals comfortably even if
you would like to retire early or take a break in career to pursue a college
degree. |
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Planned utilization of investible surplus is a critical factor
for creation of adequate wealth required to meet the basic
responsibilities of life. |
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