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FINANCIAL SECURITY

Financial Security is the ability to afford your expenses, live comfortably on your income and save for the future. A big sign of financial security is having enough emergency savings to cover oneself when times are tough. Another sign is steering clear of high-interest debt. The term is actually a certificate or other financial instrument that has monetary value and can be traded easily. Securities are generally classified as either equity securities - such as stocks and debt securities such as bonds and debentures. Financial security is fungible – in other words they are assets that can be exchanged quickly and easily for others of the same type. Just like any one, any share of a company’s stock can be replaced by any other share of the same company’s stock. Financial security is the condition of having stable income or other resources to support a standard of living now and in the foreseeable future; including probable continued solvency. Financial security depends on one’s age, income-needs and financial objectives. But generally speaking, 4% rule is a good measure of financial security. If anyone is able to safely withdraw 4% from one’s investment accounts every year and never run out of money, it is probably safe to say ‘Financial security’.  Being debt-free, controlling one’s money, being prepared for emergencies, increasing financial securities, plan for children’s needs are the basic key elements to build financial security. Every financial asset is not a financial security – only those assets which are tradable are referred as financial securities.