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Are you making your assets work back for you?
Posted on: 07/Jun/2018 11:34:32 AM
Take a situation wherein your wife has two properties registered in her name. Both of these properties are lying idle (locked, not rented out). It generally happens that we tend to neglect this but by doing this we are only neglecting an income-generating opportunity.
Yes! If you can rent out that property, the sum earned obviously contributes as your passive income. This passive income can come to your rescue and may even be successful in pulling you out of any serious debt which you’re facing.
The point here is anything that is kept idle may it be your business/gold/fixed assets/liquid cash etc, wouldn’t generate money for you.
It is your responsibility to make sure that every part of your asset works back for you.
Purpose of doing the above: It’ll lead toà Increase in your cash flowà Increase in your net worth (provided that with increase in cash flow wouldn’t lead to drastic increase in your expenses).
So how to encounter expenses:
Follow my simple formula: Matching Grant, which is the amount spent should equal the amount saved.
EMI-A DEBT TRAP
Another debt trap is purchasing house while young. Most of the youngsters when they start to earn are in a haste to own a house. This sort of mentality is mainly influenced by the society where they believe that a person is “settled” only when he/she owns a house. How is it a debt trap? When you purchase a house while young, when you’ve just started to earn, the probability that you’ve purchased it on a EMI basis is high.
“This means that you’ve already committed to long term expenditure (cash outflow) without having committed to maximum savings/investments.”
More saving/investing actions while young, when commitment is far lesser, will lead to earlier and easier accumulation of corpus amount desired.
Read more on EMI here http://www.nikhilsinghi.com/emi-the-lord-of-debts/
