Hi, I'm new here and I'm trying to understand Living on Equity more. I'm reading the guide at (http://www.invested.com.au/76/living-equity-part-1-preliminary-concepts-1552/?garpg=4) and so far I'm understanding and getting alot out of it. What I'm having trouble with is a 'Safety Buffer' "For example, say an investor desires an annual passive income of $65,000. If an investor had $2.4m in assets growing at 5% per annum this would provide $120,000 of growth each year. Using a loan 80% of this growth could be harvested to provide $96,000 in a line of credit. After putting aside $31,000 as a buffer, this would leave $65,000 for living expenses. Generally you should only access two-thirds of your capital growth in any year and leave the remaining third to compound for leaner capital growth years and to cover the interest cost of the dollars you have spent. The part in red is the part I don't understand, if anyone could shine some light on it, it would be appriciated. Thanks.