Today I would like to share to you another thing that you can do with your savings. Aside from using your saving in acquiring assets that can create for you a passive income, you can also use your savings by investing into your financial education.
Why financial education?
Before I answer that question, let me tell you about an ebook by Bro. Bo Sanchez entitled “My Maids Invest in the Stock Market”. Though I am already investing in the stock market, I found this ebook so inspiring because even Bo’s house maids were able to invest in the stock market. You might ask, how is it possible for a house maid be able to invest in the stock market? Who thought them about the stock market?
My friend, that’s the financial education I am talking about. Those house maids invested in their financial education. They were thought to set aside a portion of their monthly income and they invest that money into the stock market. Since they are working for Bro. Bo Sanchez, as a house helper, they are receiving personal coaching from him during their weekly meeting.
Now let’s go back to that question why financial education? Why invest in financial education?
Investing in your financial education means setting yourself financially free. Being financially free means spending more time with your family. Wouldn’t it be fine if you can manage to spend more time with your family? No, I’m not talking about spending time with your family during weekends but spending more time with them at anytime of the week.
Investing in your financial education means to can foresee yourself retiring not dependent to your pension or dependent to your children.
I do wish I can give you more answer to that question but I would like to encourage you to discover it by yourself on November 13, 2010, Bro. Bo Sanchez will conduct a seminar on How to Become Truly Rich. Through this seminar, you will discover how you can start investing in the stock market and plan for your retirement. And not only that, should you decide to join his Truly Rich Club, he will guide you step by step as you start making the stock market as your piggy bank. Wouldn’t that be a great deal that is rarely to be found this days?
You can have a continous financial education through Bo’s ongoing coaching as you grow financially.
Oh wait a minute, you might not be able to attend because you are working abroad. How about giving it as an early Christmas gift to one of your relative in the Philippines. For sure it will be more valuable than giving them the top of the line gadget this Christmas. Be reminded of this, financial education priceless, it cannot be taken from them. It will stay with them and it is their gateway to financial freedom.
So don’t you think its about time to invest in financial education?
Monday, October 18, 2010
Thursday, October 14, 2010
ASSETS AND LIABILITY
In my previous post CREATE PASSIVE INCOME I shared to you how you can create passive income by acquiring assets. Now I will be sharing about assets and liability.
What is asset and what is liability?
Asset as defined in Wikipedia – In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. Simply stated, assets represent ownership of value that can be converted into cash (although cash itself is also considered an asset).
Asset as defined in Investopedia – A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit.
Liability as defined in Wikipedia – A liability can mean something that is a hindrance or puts an individual or group at a disadvantage or something that someone is responsible for or something that increases the chance of something occurring.
Liability as defined in Investopia – A company’s legal debts or obligations that arise during the course of business operations. Liabilities are settled over time through the transfer of economic benefits including money, goods or services.
Personally I am applying the definition of Robert Kiyosaki for asset and liability. Robert Kiyosaki defined asset as something that you own that brings in money into your pocket, while liability is something that you own that takes out money from your pocket.
Assets and liabilities determine whether we can create savings or not. As Robert Kiyosaki says, the rich people acquire assets while the poor people are collecting what they thought as an asset but in reality they are liabilities. No wonder why the rich becomes richer and the poor become poorer. It is because of a matter of how much they acquired assets and liabilities.
By applying the definition of Robert Kiyosaki for asset and liability we now have a way of identifying an asset against liability.
Following the example of Robert Kiyosaki, I took a piece of paper and draw two columns. I named the left column as Asset and the right column as Liability. Then I start identifying everything that I own whether it is an asset or liability. I included my daytime job in my asset column because it is the main source of my income and therefore it is bringing in money into my pocket. During my first try I found out that I got a lot of liability while my assets are few. With this kind of result I will surely find myself having a hard time creating my savings.
Since I really wanted to create savings for my family, I need to lessen the quantity of my liabilities and at the same time increase my assets. The first step that I need to do is to turn my liability into an asset. An example to this is by using the mobile phone to sell e-load. Since the majority of the Filipinos own a mobile phone and majority uses the prepaid load then it is possible to use the mobile phone and sell e-load. That way the mobile phone that use to take out money from the pocket is bringing in money into the pocket thus it becomes an asset.
Another example is the refrigerator. The refrigerator contributes a lot to a high electric bill. What I did is I sell our refrigerator and we bought a freezer. You might wonder why we did that, because a freezer consumes a lot more electricity than the refrigerator. But the secret to that is we can make a lot more ice than the refrigerator. By selling more ice every day we are able to pay for our electric and water bill. So the freezer becomes an asset to us.
You may also have an idea of something that you own that can be turned into an asset, an asset that can create passive income for everyone who wants to create savings and investment. Please feel free to share your idea here for everyone.
Thanks in advance and happy saving and investing to everyone.
What is asset and what is liability?
Asset as defined in Wikipedia – In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. Simply stated, assets represent ownership of value that can be converted into cash (although cash itself is also considered an asset).
Asset as defined in Investopedia – A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit.
Liability as defined in Wikipedia – A liability can mean something that is a hindrance or puts an individual or group at a disadvantage or something that someone is responsible for or something that increases the chance of something occurring.
Liability as defined in Investopia – A company’s legal debts or obligations that arise during the course of business operations. Liabilities are settled over time through the transfer of economic benefits including money, goods or services.
Personally I am applying the definition of Robert Kiyosaki for asset and liability. Robert Kiyosaki defined asset as something that you own that brings in money into your pocket, while liability is something that you own that takes out money from your pocket.
Assets and liabilities determine whether we can create savings or not. As Robert Kiyosaki says, the rich people acquire assets while the poor people are collecting what they thought as an asset but in reality they are liabilities. No wonder why the rich becomes richer and the poor become poorer. It is because of a matter of how much they acquired assets and liabilities.
By applying the definition of Robert Kiyosaki for asset and liability we now have a way of identifying an asset against liability.
Following the example of Robert Kiyosaki, I took a piece of paper and draw two columns. I named the left column as Asset and the right column as Liability. Then I start identifying everything that I own whether it is an asset or liability. I included my daytime job in my asset column because it is the main source of my income and therefore it is bringing in money into my pocket. During my first try I found out that I got a lot of liability while my assets are few. With this kind of result I will surely find myself having a hard time creating my savings.
Since I really wanted to create savings for my family, I need to lessen the quantity of my liabilities and at the same time increase my assets. The first step that I need to do is to turn my liability into an asset. An example to this is by using the mobile phone to sell e-load. Since the majority of the Filipinos own a mobile phone and majority uses the prepaid load then it is possible to use the mobile phone and sell e-load. That way the mobile phone that use to take out money from the pocket is bringing in money into the pocket thus it becomes an asset.
Another example is the refrigerator. The refrigerator contributes a lot to a high electric bill. What I did is I sell our refrigerator and we bought a freezer. You might wonder why we did that, because a freezer consumes a lot more electricity than the refrigerator. But the secret to that is we can make a lot more ice than the refrigerator. By selling more ice every day we are able to pay for our electric and water bill. So the freezer becomes an asset to us.
You may also have an idea of something that you own that can be turned into an asset, an asset that can create passive income for everyone who wants to create savings and investment. Please feel free to share your idea here for everyone.
Thanks in advance and happy saving and investing to everyone.
Wednesday, October 13, 2010
CREATE PASSIVE INCOME
In my previous post I shared to you how you can create savings and what you can do with your savings. Just in case you are not able to read the post you can visit them here HOW TO CREATE SAVINGS and WHAT TO DO WITH YOUR SAVINGS.
Though you can do a lot of things with your savings, I am again stressing that it is best to use your saving to acquire assets that can create for you a passive income. This is applicable only if you don’t have a purpose for your savings.
What is passive income by the way?
Passive income as defined by Wikipedia is an income received on a regular basis, with little effort required to maintain it.
Passive income as defined by Investopedia is an earnings an individual derives from a rental property, limited partnership or other enterprise in which he or she is not actively involved.
Passive income then is a kind of income that you can receive on a regular basis and with little effort required to maintain it. The best example of passive income that the majority can relate to is an income coming from the rental of property.
Before we go on further,and for the purpose of information, there are three kinds of income. First is active income, this is the income that we get as a salary from our work. Second is passive income, an income that we had just defined above. And the third is portfolio income; this is the income from investments including dividends, interest, royalties and capital gains.
We will be talking more of passive income in this topic because this is the easiest income that we can create while we are actively involved with our active income. If you are able to purchase a condo unit through your savings and you have it rented then your condo unit is creating a passive income for you. If you are able to buy a piece of land and built townhouses on it and have it rented then that property of yours is creating a passive income for you.
But what if your savings is not enough for you to build another house that you can use for leasing or renting? You can try to purchase a motorized vehicle or electronic equipment and have them to be rented. However if your savings is not enough to buy a brand new one then you can opt for a second hand but be reminded of the risk in buying a second hand equipment or vehicle. That supposed to be asset might be a liability instead.
Is it possible to acquire an asset even if your savings is only a small amount? The answer to that is “YES”. This is so because an asset doesn’t have to be worth millions or hundreds of thousands. All you have to do is to identify a would be asset that you can use to create for you a passive income. Once you identify it, then the next thing to do is to acquire it and presto it will create passive income for you.
Another way of creating a passive income is through direct selling. This is where the MLM “Multi-level Marketing” comes in. You can earn through your direct sales plus some commissions from the sales of your down lines.
There are so many possibilities that anyone can actually create a passive income for themselves. And with the advent of the internet, a wide range of “passive income opportunities” have opened up for everyone. You can choose to write articles and eBooks and sell them through the internet. Blogging and affiliate marketing as well is another way of creating a passive income.
And I do believe that as time goes by, there will be more and more “passive income opportunity” that will open up for all of us. Just be keen to look around, who knows there might have been so much “passive income opportunity” that’s been unnoticed around you.
Though you can do a lot of things with your savings, I am again stressing that it is best to use your saving to acquire assets that can create for you a passive income. This is applicable only if you don’t have a purpose for your savings.
What is passive income by the way?
Passive income as defined by Wikipedia is an income received on a regular basis, with little effort required to maintain it.
Passive income as defined by Investopedia is an earnings an individual derives from a rental property, limited partnership or other enterprise in which he or she is not actively involved.
Passive income then is a kind of income that you can receive on a regular basis and with little effort required to maintain it. The best example of passive income that the majority can relate to is an income coming from the rental of property.
Before we go on further,and for the purpose of information, there are three kinds of income. First is active income, this is the income that we get as a salary from our work. Second is passive income, an income that we had just defined above. And the third is portfolio income; this is the income from investments including dividends, interest, royalties and capital gains.
We will be talking more of passive income in this topic because this is the easiest income that we can create while we are actively involved with our active income. If you are able to purchase a condo unit through your savings and you have it rented then your condo unit is creating a passive income for you. If you are able to buy a piece of land and built townhouses on it and have it rented then that property of yours is creating a passive income for you.
But what if your savings is not enough for you to build another house that you can use for leasing or renting? You can try to purchase a motorized vehicle or electronic equipment and have them to be rented. However if your savings is not enough to buy a brand new one then you can opt for a second hand but be reminded of the risk in buying a second hand equipment or vehicle. That supposed to be asset might be a liability instead.
Is it possible to acquire an asset even if your savings is only a small amount? The answer to that is “YES”. This is so because an asset doesn’t have to be worth millions or hundreds of thousands. All you have to do is to identify a would be asset that you can use to create for you a passive income. Once you identify it, then the next thing to do is to acquire it and presto it will create passive income for you.
Another way of creating a passive income is through direct selling. This is where the MLM “Multi-level Marketing” comes in. You can earn through your direct sales plus some commissions from the sales of your down lines.
There are so many possibilities that anyone can actually create a passive income for themselves. And with the advent of the internet, a wide range of “passive income opportunities” have opened up for everyone. You can choose to write articles and eBooks and sell them through the internet. Blogging and affiliate marketing as well is another way of creating a passive income.
And I do believe that as time goes by, there will be more and more “passive income opportunity” that will open up for all of us. Just be keen to look around, who knows there might have been so much “passive income opportunity” that’s been unnoticed around you.
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