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Slack is essentially a surplus of financial resources that an individual has available. A surplus of resources can help in the instance of an unexpected financial development. In a nutshell, Slack is the flexibility afforded to an individual by way of a surplus of financial resources that includes guaranteed income sources, savings, and risk management strategies.
To have Slack means having ready access to cash or insurance proceeds, thus Slack is an asset. The financial success an individual experiences is determined over the long term as decisions accumulate. Slack can help offset any mistakes made along the way, as well as combat feelings of insecurity or fear, if the unexpected were to occur.
On the other hand, having too much Slack can cause its own issues. One of the main challenges individual’s face is effectively applying financial resources to minimize threats while capturing potential opportunities. The pursuit of too much Slack to protect against potential and unnamed threats can negatively impact success and enjoyment in the present, when the unexpected has not occurred or is not occurring. Further, it can also make an individual slow to react when opportunity presents itself. Balance, therefore, is absolutely vital in this arena.
When you experience a disruption of any kind, Slack can actually help get you through to the other side. This is where we come in. Read on to learn how Slack is measured and how we can help you and your business use it effectively with a Slack evaluation.
When we test a financial plan for Slack, we apply specific tests to account for the two types of disruptive developments that might occur: known unknowns and unknown unknowns. A known unknown is a risk of which we are aware, but for which we are unable to define a precise impact. An unknown unknown is both a risk of which we are unaware and for which we are unable to define a precise impact.
These are the specific tests that we apply: