About Assets and Liabilities 2

These definitions are within the context of cash flow. A good investor invests for both income and capital gain. When you are getting income from the asset, you will not be under pressure to sell, and if you decide to sell, you can hold back if the market is down, as you do not really [...]

About Assets and Liabilities

The reason folks acquire liabilities thinking they are assets arises from financial illiteracy. Conventionally, an asset is something you own that has value. This shows up on the asset column of your balance sheet. For the financially literate, what makes an item an asset or liability depends on the cash flow pattern. In corporate mergers [...]

Image Affluence: All that Glitters is not Gold

From the previous post – You can be Millionaire and Broke, we can see that having a high net worth does not necessarily translate to being cash rich. You can be asset rich and cash poor, and may be forced to dispose of your assets at below market prices when you negotiate from a position [...]

You can be Millionaire and Broke

Your net worth is not a true indicator of your financial situation. You can be rich and broke, a millionaire but shaking out your pockets to make some basic purchases like fueling your car or money from groceries. If you have not been in that position, it may sound like a fable. You see, your [...]

What is Your Net Worth?

Another aspect of your financial fitness test is knowing your net worth. Most people have no clue what the number is. The do not know how much they own or how much they owe. They carry a fuzzy number in their head, based on assumptions not related to reality. If you have serious financial goals, [...]

Your Financial Fitness Test Results

Congratulations if you did your financial fitness test. You are among the few who have a clue as to the state of your finances. That was a starter version but serves well to give you a snapshot as to how you are faring in managing your finances. What does the result mean? If you answered [...]

The Asset Allocation Approach to Building a Solid Financial Foundation

Spending below your income is a fundamental law of financial freedom. If you break this law, you become broke yourself. However, it does not end with saving. You need to build a solid financial foundation with your savings, else you will misappropriate your savings and end up broke all the same. So the big question [...]

The Myth of A Financial Breakthrough

A lot of good folks are sitting pretty waiting for a financial breakthrough – a financial windfall which will solve all their money problems; that day when all their money problems will be over and all their prayers will be answered. That day may never come in that shape or form. The money will very [...]

You Are Self Employed

It may come as a surprise to many that we are all self employed. Very few people realize this until after retirement, when they scramble to get their act together and learn new tricks in old age, or after a job loss. For many, the outcome is catastrophic financially – the retiree and his gratuity [...]

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