Module 7 · Lesson 2
Working With the Coverage Ratio
Using coverage as the framework's primary progress metric and understanding what moves it.
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Working With the Coverage Ratio is part of Full Access
Using coverage as the framework's primary progress metric and understanding what moves it.
- What you produce
- Plan a gradual, measured transition where portfolio and business cash flow replaces earned income.
Educational material only. Nothing here is investment, tax or legal advice.
Reflection question
Which is more achievable for you this year: adding capital, or removing a recurring obligation?
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How this applies by framework phase
The same material reads differently depending on what your capital needs to do next. You may be in more than one phase at a time.
- Capital Building
- Read this as a question about direction: which surplus, which income stream, and which asset should the next dollar move toward — and what would make that move durable rather than opportunistic?
- Capital Conversion
- Read this as a question about productivity: what is the capital you already own currently doing, what cash flow could it support, and what drag, liquidity or liability constraint has to be handled before it can do more?
- Capital Preservation
- Read this as a question about durability: what could force a sale at the wrong time, how much liquidity keeps that from happening, and how is purchasing power protected without abandoning growth entirely?