Any view on personal finance and the potential to creating assets MUST begin with understanding what areas one needs to focus on. Without this, one can only run around aimlessly like a headless chicken.
Wealth constitutes two major components - Income and expenses. Wealth increases by achieving the following objectives:
- Increase your income and/or
- Decrease your expenses
Agreed that we are all aware of this. But frankly, how many of us have been actually been able to achieve the above objectives consistently for prolonged periods of time? Well, not many.
Notice that I used “and/or” expression after the first objective? Do you know why?
The answer is very simple, yet it is useless when someone else tells you. Take minute and try to interpret the meaning in your context. Once you understand this, you will be able to analyze your own position fairly.
I will be back shortly with the answer…
Tags: assets, personal finance
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