You have one kid graduating high school in 12 years. You’ll need about $100,000 for their college. Another kid will head off to college 14 years from now. Another $100,000 needed then.
When you invest, you have to keep these future cash needs in mind. You need to have enough to pay these college bills.
By taking those looming future payments in mind, you’re involved in liability matching. You are matching your investing goals to future obligations you’ll eventually have to pay.
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Finance: What is liability?3 Views
Finance allah shmoop What is a liability What is it
it's what you owe you bought four million gumballs on
credit for your party pack for the parade the money
is owed to gumballs are us in ninety days that's
a short term liability Alright next example you borrowed eighty
three million dollars to set up your new do dental
drive through service and that money is due in twelve
years at seven percent interest a year that's A long
term liability Why long term Because it comes due in
over a year and that's basically it liability comes in
two flavors short and long term and it's one of
the key elements of the balance sheet as it lives
in this space ride over here So yeah that's a
liability all this crap time now considering how many gumballs
you've consumed in the past month you really should get
yourself to a good drive through dentist or maybe sleep 00:00:56.998 --> [endTime] in mr
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