Transition from Income to Capital.

For most of history, capital has been king and income hard to come by.

Since the industrial revolution, the world has been through a period where the middle class have been able to build capital through having substantial incomes. That trend has been turned around in the last 30 years as discretionary expenditure, the cost of housing and a lack of productivity has meant that incomes have been consumed by lifestyle requirements. We now have people that have been on high incomes for most of their lives finding themselves on a pension or part pension.

The whole concept of high salaries is now been questioned. 

The same is true in the equities market. For many years you bought companies with solid balance sheets. Then came along the FAANG and BAT stocks selling at huge multiples of present earning because of their perceived potential growth.

Whether personally or corporately you are going to need a strong balance sheet to survive the future economy.