Financial Order of Operations - Funding Sources

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Paisley
Posts: 35
Joined: Sun Apr 14, 2019 12:32 pm

Financial Order of Operations - Funding Sources

Post by Paisley » Mon Apr 15, 2019 12:34 pm

Thank you everyone for helping me understand your perspectives on a commonsense "Financial Order of Operations"!

As I thought about this discussion, it occured to me that it is probably very important to evaluate the source of funds for the financial order of operation items.
As I think through it, it seems that funding usually comes from these categories (if I'm missing something please feel free to share):
1. Income
2. Savings
3. Inheritance
4. Gifts
5. Lines of Credit: HELOC, Reverse Mortgage
6. Sale of Assets

Here are my questions regarding source of funds:

In light of issues such as taxes...
Is there a commonly accepted "ranking" of what to tap into 1st, 2nd, 3rd, 4th for the various line items discussed in my earlier post?
AND/OR
Is there a "source -> use" "key / map / cipher" out there?

Thanks in advance for your insights everyone!

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Stinky
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Location: Sweet Home Alabama

Re: Financial Order of Operations - Funding Sources

Post by Stinky » Mon Apr 15, 2019 4:42 pm

Is your question aimed at someone who is working and accumulating assets, or someone who is retired?

Some observations on your list;
1. Income from a job would always be the first money spent. Or income from Social Security or pensions in retirement.

2. You would have a plan for spending down savings in retirement. However, one should be building savings while working, rather than spending down savings.

3. Inheritances and gifts are nice if you receive them. Depending on the size, you could either spend them or look at them as one-time items.

4. Both lines of credits and selling assets are things that you might do in retirement. Hopefully, there’s no need to rely on Loc’s while your working.

Need more clarification on your goal to give a better answer.
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Topic Author
Paisley
Posts: 35
Joined: Sun Apr 14, 2019 12:32 pm

Re: Financial Order of Operations - Funding Sources

Post by Paisley » Mon Apr 15, 2019 4:56 pm

My question is aimed at both - accumulation phase funding source order then retirement phase funding source order.

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