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Definition

<p style="text-align: justify;">This is the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">capital</span> which the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">private investor</span> has available for <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">investment</span>. This can include the equity in your house, your <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">stock market</span> <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">portfolio</span> and other assets (such as <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">krugerrands</span>). To calculate your capital base you must take the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">market value</span> of all your <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">assets</span> and subtract any <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">debt</span>s such as a <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">mortgage bond</span>, <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">overdraft</span> or trade accounts that you may have. The building of a capital base can only be achieved by <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">saving</span>. Ultimately, everyone has to live off their capital base and the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">income</span> which it generates when they retire. As a rule of thumb you should aim to save at least 10% of your gross monthly income to build your capital base.</p>