The Secret of the Rich and Poor
The Secrets of the roads are that Short distance Travelers go fast and Long destination Travelers are generally going Slow & Relax
We can keep a single home for our basic needs and convenience. With more than one house, it is not said to be an asset, if we had not generate any income. Instead, we have to pay the House tax, Insurance and other maintenance costs for Non-generated income house.
There is no great or better difference between the Rich and Poor. With the money you have earned, what you are doing now with that is important. Self Control is very important to being Rich, you don’t have to make anything to be as Poor.
When we approach for the Personal Finance, mostly his financial habits determine whether he is poor or rich. If you have a Property or Asset, then it should be create a Regular Cash Flow or Income, Otherwise it will be considered as Liability.
Most of us are not willing to take time to learn about Personal Finance and related on Financial Planning. We just keep an eye on what others are say in the Media, but not with our learning.
Here is how to identify whether you are Rich or Poor,
Net worth = Total Assets – Total Liabilities
Rich worth = Total Assets / Total Liabilities
If your R-worth > 1.0, then you will be ‘No Need to Fear’… Just Plan for Financially Free !
If it’s =< 1.0, then you have to be careful on your Debt…. “Don’t Bankrupt yourself”
Generally for the Net worth Value, try to multiply your Net worth by 15 to 20 times of your annual income.
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