See also

• OCBC: 70%Singaporeans can’t last past 6M if jobless
• invest salary{peak earning phase #plowback #JackZ 

I like the visual (albeit loose) concept of “cashflow highground”, similar to “moral high ground “. Physical flow is usually from highground to low ground. Sometimes, I prefer the shorter phrase “PFF highground”.

Each household (single or family) can move between lower ground and higher ground as their life unfolds. Even a country can go through the same, as SG did during covid19.

On a low ground, household outlays exceed income, debts exceed assets, debt servicing is a major recurring expense, or salary income stability is in doubt. Some households sink lower and lower, apparently unable to escape. Common among the immigrants and non-white, non-Chinese Americans. In a contrast, JackZ (Raymond to a lesser extent) lost his job and then hit the pandemic, but thanks to his savings and low burn rate, he probably didn’t sink further.

In a down turn such as the widespread job loss during covid19, you don’t want to find yourself on the lower grounds as they are more at risk of “overrun”.

Remember the WhyFactor production on scarcity? On the lower ground, people struggle to cope. On the higher ground, you can enjoy, relax and live in relative peace and comfort, but lifestyle creep can erode the high ground.

Therefore, on the high ground I feel a need to build up my defense, strengthen my foundation, and raise my ground even higher. So What type of insurance would protect my high ground? Not endowment, not life insurance. Here is my insurance plan:

! Even a middle-lower income household can achieve cash flow high ground, by reducing burn rate (and lifestyle creep), debt,, and build up a reserve and nonwork income stream. I feel Raymond has not done enough on the income side.

— How is BRBR related? Big ticket infrequent outlays are less visible in BRBR, but more clearly felt in high/low ground.

• Personal prognosis — If I were to take on a USD 700k school-district house, I would slide into lower ground, partly due to high interest and pTaxes.
• UChicago MSFM — did I slide into lower ground? I would yes slightly due to the high burn rate like 20k/Y.

— How about Fuller wealth?
Fuller wealth as a barometer is one of the best indcators of high/low ground.

— Disaster insurance — such as TPD, major medical and eldershield.
These are rare events so hopefully successful claim rate is low and premium is low. Such low-cost insurance plans help strengthen the foundation of my high ground.

Recall the tallboy vs K3 story?
— How about lifestyle creep? I would venture to say if your income is below 300k/Y, a key difference between high ground and low ground is the attitude/habits on lifestyle creep.

The creeps don’t make a huge difference numerically (because they are small spends) but the attitude does make a huge difference. You have to be conscious of where you spend. You need to review your paste decisions critically.