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Quadrant IV
Families that have negative cash flow and positive net worth
are in Quadrant IV.
Your household could be in Quadrant IV if you are retired,
experiencing hard times, or simply haven't implemented a
savings program or began debt management or investing.
Your circumstances may find that you need to tap into your
financial assets to meet cash flow needs. In a normal
retirement you are planning to use your financial resources to
augment cash flow. However, when you still are in the
accumulation phase but hard times have moved you from
Quadrant III to Quadrant IV you need to control spending,
maintain a positive cash flow, have a savings program and be
involved in debt reduction and investing.
Regardless of why you are in Quadrant IV, a time of retirement
and fulfillment, or a special situation to be addressed,
Prosperity Concierge has advice to help you maintain a
positive cash flow.
Cash Flow
The first step is to achieve a positive cash flow. And reducing
spending is where you need to focus first.
Savings Program
Once your spending is reduced, if you aren't retired you can
begin to look for opportunities to increase your income. You'll
need to start a savings program that allocates 10 percent of
your income on a regular basis toward savings.
Debt Management and Investments
If you aren't retired, after you have spending under control
and you've begun a savings program you need to focus on
two areas: debt management and investments. The goal here
is to allocate a total of 20 percent of income to a combination
of debt reduction and investments.
Your debt reduction should be tailored so that all of your
credit card debt is eliminated within three years. Above any
amount that you allocate toward debt reduction you should
allocate the balance of the 20 percent toward investments.
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