Foundations

You are in the process of establishing the foundations of your family and career.  The focus in this stage is often on making major purchases, typically a home and cars, and settling into a lifestyle you would be satisfied living for the rest of your life. Often, you either need to borrow or cash-in some of your options to make these major purchases.

Key Issues & Actions

Before you can calculate your Critical Capital™, you need to know how much it will cost to live a lifestyle you'd be comfortable living for the rest of your life. During this stage, you are discovering what that lifestyle is and settling into it.

• Identify the major purchases. Decide what major purchases you need to make before moving on to the next stage. Some never leave this stage because there are always more expensive cars and larger homes to buy. Be specific and realistic.
• Carefully analyze how to make those purchases. You will probably need to borrow to make these purchases or cash-in some of your options. Your objective is to use as few of your options as possible now, so that you have enough left to build your Critical Capital™.
  • If you borrow - make sure you can afford to make the payments without having to use any of your options.
  • If you cash-in some of your options - remember that if you cash-in too many too soon, you may be giving up a future fortune.
• Establish a lifestyle you can sustain. A sustainable lifestyle is one you can be satisfied living and one that you can afford. If you are dependent on your options to finance your lifestyle you are very vulnerable if the price of your company's stock goes down and you may never have enough left to build your Critical Capital™.
• Remember: It is very difficult to go backwards. We recommend that you establish your foundations at the "minimum" standard you can live with. In the future, if your options skyrocket in value or your salary increases, you can always increase that standard.