Stop Spending on things that turn down in value
>> Saturday, May 15, 2010
Stop Spending on things that turn down in value
Base your objective on financial phase.
When you establish analyzing your pies, chances are you will realize you have spent large sum of money on a lot of things that eventually lose in value. I notice that many of us buy appliances, furniture and gadgets that we can otherwise do without. We think these things are assets but they are not. You should stop buying on impulse. Before you buy, you ask yourself if you really need it or whether or not you can really afford it.
Know the difference between asset and liability. If you religiously update your SAL, you will find out whether or not your expenditures are increasing your net worth or not. If not, you have been probably have been buying liabilities more than assets
“Assets put money in your pocket while liabilities take
out money from your pocket”
Consider yourself as a salesman, is a car an asset or a liability?
Most of you will answer that it is an asset. Why? Because as a salesman, you need a car to move around, call on new customers, and also to look for a new ones. In principles, this answer is correct. But in personal finance, it may not be correct. When then is it financially correct? And when is wrong? What do you think?.............
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