Sunday, February 2, 2014

The Key of Financial Savvy

People try to reach the financial savvy. They buy so much asset to makes more money. They can make dozen of thousand easily in a month. While the others are difficult to make money. The crisis make the asset value decrease but the liability rise. 

Asset is something that you have. This is the most important of financial savvy key. Solomon is the most rich man in the world.He has so much gold in his deposit box that has so much key. The number of asset that you have equals with the wealth.
With the asset, you can make money. For example, You can hire the store to the retail shop or cafe. The tenant will pay you monthly or yearly, depending on the contract. The asset is the requirement for borrowing the money. The bank or financial institution will ask your asset as the guarantee. They can seize your asset whenever you cannot pay off the debt.

Liability is the something that you have to pay. You may have mortgage loan because you want to buy house in credit. You may settle your debt for twenty years later. It is hard when you should pay the house cash unless you inherit so much money from your parent or you win the prizes.
The credit card that you use to buy anything is a liability. You should pay the bill at the end of the month with interest and administration fee.
Most people have liability include the rich man. They owe the money to multiply the asset. Some businessman must have liability either short term liability or long term liability.

The Expenses is also the key of financial savvy. When your expenses are higher than the income, you will bankrupt soon. Reduce the expenses as you can by deleting the unnecessary items. You should reduce the gasoline expenses or transportation cost. Use the public transportation for it that cost just $100. The cost could be either higher or lower, depending on the distance.
You should live below your mean which means you should not be extravagant. Use the simple product rather than luxurious product. You do not have to use the brand product that price is higher than the generic product.
Alternatively, you can seek out to boost your income such as side jobs, teaching, blogging, selling online, and so on. Blogging does not take much time to do it. Use your time after work hours for writing once article a day. You may generate $1000 per month.
Read also:
Investment in Collectibles
How to create strict budget

No comments:

Post a Comment