5. Estimate Your Starting Balance Using Liquid Assets and Possibly Adding Other Assets That Are Soon to Become Liquid

To assess where you are going to be in the future, you need to account accurately for your current resources. Include only your liquid assets—the true amount of cash and securities you have available. For example, a house you live in should not be counted among your liquid assets because you are not going to sell that house for cash and live in it at the same time. On the other hand, a house currently under agreement to be sold, and settling in fewer than 60 days, can be used in this calculation. You have to be honest about what is liquid and what isn’t. Let’s say for the sake of our example that you have $250,000 in cash and ...

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