include on-going living expenses in liquidity constraint? 学会

jcole21

I've seen it there at times on some exams and on others it's not there at all. Should you just be safe and put all outflows from the portfolio in the liquidity requirement or only major outflows?

cityboy

If the portfolio is to pay living expenses , yes mention it.

If you are covered there e.g. salary after tax matches the living expense , do not mention it, go for bigger things like education needs

strikethree

ok so only for outflows from the portfolio? What about if the person wants to give to a charity when they die or 15 years down the road? Does that go in unique circumstances or liquidity?

mik82

My inclination is to put it into unique , unless I run out of things to write for liquidity

ohai

gotcha. thanks.

Chuckrox

The charity piece can even go into "ability to take risk" e.g. 2007 Morning.

They have a charitable objective which they can give up , so higher risk taking ability.

I think you have to stretch the imagination and come up with creative things like that

NakedPuts2011

show is correct: u definitely should not include calculation pieces in liquidity I think. Just mention , regurgitate or paraphrase things that look like liquid needs , hopefully one or two outstanding things , no need to think deeply

PalacioHill

That's how I feel the show, if it's at death, then leave it out.

infinitybenzo

Do you guys have a general statement that you consistently use for these? Obviously they all differ but generally it's either maintain real value of portfolio through retirement or maintain real standard of living through retirement, cover after-tax living expenses on an inflation adjusted basis etc.

Analyze_This

U referring to Return objective which can be canned in this manner a la Schweser

For liquidity , I'll go simpler like "Needs $xxx for yyy needs in 3 years " etc.