1

I'm trying to find a word.

When one has capital, and does a particular process to it, they can create a perpetuity from it. I'm not actually certain, perpetuity is the right word here. By perpetuity I mean a general term for a thing that yield a constant income. Is this term correct? Assuming it is:

For example, if you own a home, you may rent it out, thus creating a perpetuity.

I'm looking for a word, for what is done to the capital that makes it into a perpetuity.

I have capital, I {{BLANK}} it, now I have a perpetuity.
Fill the {{BLANK}}.

See invest doesn't work as you can invest money to gain capital, but never gain a on going stream of income from it.

Frames Catherine White
  • 631
  • 4
  • 13
  • Is it possible that you meant annuity rather than perpetuity? Annuity is regular income, typically for a term of years, while a perpetuity is structured to be perpetual. Renting out a home is usually not perpetual, so I don't think it's a perpetuity (at least in the US context). – NL7 Mar 26 '14 at 13:56
  • 1
    "Annuitize", perhaps? – Chris W. Rea Mar 26 '14 at 16:00

1 Answers1

1

A perpetuity in the mathematical context is the equation in your link.

A perpetuity in the legal sense is a liability that never matures, presumably paying endlessly, except for a banknote that pays nothing. An example would be UK war bonds during WWII.

Real estate can be modeled like a perpetuity for convenience, but it is not a legal obligation to pay forever if one excludes taxes.

If one starts with capital and ends with a perpetuity, one has bought a perpetuity. If one starts out with nothing and ends with capital by way of a perpetuity, one has sold a perpetuity.