Which is better income or capital?

Measures of wealth, solvency and happiness at least politically for people and businesses alike
1) Income - Outgo
2) Assets - Liabilities

The question is how you wish to define them and what the public what them to mean.

1) varies in many ways eg profits, cash flow.
income - taxes  is a political version, the definition of tax being manipulative eg United Kingdom National Insurance is an income tax in all but name and is a deduction from wages.

Level of income tax and liquidity matter as you may need to pay cash in an emergency.

If the population median of Income - Outgo is too low which can happen if prices are too high, the political incumbent is in trouble.


2) Assets - Liabilites is supposed to be solvency.
However, who values their earnings, pension plans and mortgage actuarially or at least over the whole of the lifetime of payments?  I suppose on death the value of the estate shows how successful the individual has been in bequeathing to their next of kin.  Also as mortgages are sometimes used to buy houses, it means that many are likely to have this as negative which is not quite the same as insolvent.

In both 1 and 2 there is sometimes a margin.

However, as pointed out on the tv programme Capital Account (search on youtube if you want to find out more about this free show) , you may have to worry if your assets are someone else’s liabilities.  Also, bear in mind my actuarial learning said that government bonds are the securest asset!  That must have been a long time ago!

Finally, as also pointed out on Capital Account, currency as legal tender has an additional value at least at home!

Capital intensive - meaning

Contracting is capital intensive, You have to pay for lots of things before you get any payment for services rendered. You hope to earn more than your outlay initially and for the whole of the freelance arrangement.
Things to pay for include transport, accommodation, food etc.

As you will also realise rapidly growing insurance companies like rapidly growing babies require more capital and thus more expenditure than less rapidly growing ones or in the case of companies contracting ones.

Thus a source of capital (eg money/resource) can be the use of an overdraft, or loan no matter how temporary. Another source could be any equipment or assets which you use but not purchased for the arrangement (eg clothes - not purchased for the business but obvioulsy need to be worn!)

Managing risk and lucky insurers

Lucky insurers. Insolvency of companies will protect lots of insurers and reinsurers from significant costs

Link: http://www.telegraph.co.uk/health/women_shealth/8999936/The-breast-implant-scandal-strips-away-the-glossy-euphemisms-of-cosmetic-surgery.html

Commentary:

Insolvency is great news for some insurers. The product liability insurers should be very relieved at the moment. At the moment Cosmetic surgery companies are being pressurised into redressing the situation - removing implants.
What are the problems and issues?
However who should pay and how long have the companies got?
In other words to what extent is this an operational research problem and to what extent is this an actuarial problem?
Are there insurers who can pick up the company tabs?
What order should the implants be removed? FIFO or some sort of triage?

Further down the link, one way to manage reputational risk is to get a proper typist or what used to be called by the masses a secretary and don't let others tweet sincerity/remorse/praise on your behalf.