Tuesday, July 24, 2018

Solvency and Endurance

Wealth and Income are only clues as to someone's financial strength. You have to look through the smoke (debt) and mirrors (signals of confidence). Solvency is the accounting measure for whether someone's assets are bigger than their debts. When the water flows back, are they nightswimming? Genuine Solvency allows Endurance. The ability to make it through droughts and tough patches where others would falter. To be the last one standing when new rains arrive. Solvency doesn't have a lot to do with activity. On the surface, the activity is not affected. To the world, nothing appears different. Our ability to endure is based on our internal reserves. Our inner strength. Our ability to look after ourselves when things go horribly wrong. What you can see isn't always what matters.

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