LIQUIDITY - Ability to Access Your Money

Poor 1 - Your assets are mostly tied up and cannot be converted quickly to cash for emergencies

Fair 2 - You can access your money but could incur penalties or suffer a loss

Good 3 - You can access your money, but not without incurring cost (by tax or other penalties)

Better 4 - You have predictable cash flow income but have limited access to lump sums, if needed

Best 5 - You have tremendous liquidity and can access your money electronically within a few hours or a few days

SAFETY of PRINCIPAL

Poor 1 - You're susceptible to market volatility and the potential for loss is extremely high

Fair 2 - Some of your money is in institutions that do not have strong saftey ratings: they could fold

Good 3 - You diversify by offsetting high-risk vehicles with some low-risk vehicles

Better 4 - Your money is in a safe vehicle, but the tradeoff is very low rates of return

Best 5 - Your vehicle has very low risk. Your money is protected from market volatility and inflation

RATE of RETURN - Linked to Inflation

Poor 1 -Any returns are usually negated by downturns in the market - very little net growth

Fair 2 - 0%-2% rates of return (pathetically low), while inflation outpaces gains and erodes principal)

Good 3 - 2%-4% rates of return, and you're set up on a 4% payout to avoid outliving your money

Better 4 - 5%-12% average returns, but returns are taxable when you withdraw your money

Best 5 - 7%-9% historic average returns: tax-free during accumulation abd distribution phases: hedging against inflation

TAX-ADVANTAGED - On the Seed or the Harvest?

Poor 1 -Savings and investments are taxed-as-earned (on the seed AND harvest)

Fair 2 - Traditional IRAs/401(k)s (tax-deferred accounts): seed money not taxed: pay tax on harvest

Good 3 - Roth IRAs and 401(k)s: pay tax on the seed, but a tax-free harvest: IRS limitations/rules

Better 4 - Tax-free accumulation; access and transfer of money with greater flexibility and benefits

Best 5 - Tax advantages on contibution, accumulation: distribution and transfer phases

K.A.S.H. GENERATOR vs a Battery Approach

Poor 1 - You are just hoping to survive and not outlive your money: expenses exceed your income

Fair 2 - You're not saving enough to be prepared for retirement: you're always striving to be secure

Good 3 - Your financial battery is getting charged, but taxes and inflation may cause it to die

Better 4 - You have sufficient financial resources, but are not capturing Knowledge, Attitudes, Skills, Habits

Best 5 - Generating tax-free cash flow in a perpetual fund: transferring cash and KASH as "Generational Wealth"

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