What's your Earning - A Personal Cash Flow Meter

What's your Earning  - A Personal Cash Flow Meter

Earning money, isn't an easy one ?

Absolutely, Earning money is an easy one, but it's hard to keep (grow) it. I mean that the Jobs and Earning money are easy on these techie days. Somebody have the value on their Dignity, Prosper and many of us have, earning more (Money) is a big value. Still, few one can make easy and more of them think that, it's hard to earn. Everyone of us, feeling that the rich one have more money and other's can't. But is it a right away to tell ?

Not always, many of us hurting their health to make wealth (Money). Even Apple's Steve Jobs had earned a lot and respect too, but the health was not support for him.

I am not telling you that, you have to earn more to be Rich (or) Financially Independent. The think is, how you utilize the earnings and to grow, while you have a little money or No job.

What you have Earned ?

As an individual, he earns ₹ 1,00,000 /- salary per month and spending ₹ 99,000 /- , then he actually earned just ₹ 1,000 /- ( 1,00,000 - 99,000 ). He is not earning ₹ 1,00,000 /- (Not keeping). If another one is earning ₹ 20,000 /- and saving a ₹ 5,000 /- at the end of the month, then his expense went as ₹ 15,000 /- and earn a way of ₹ 5,000 /- by saving. Your Earning money must grow is an important.

But, we socially dropping a word that a person earning  ₹ 1,00,000 /- is a wealthy one and who he earns just ₹ 20,000 /- and saving a ₹ 5,000 on that called as a Middle or lower class men :)

" If you born poor, it's not your fault. But if you die poor, it's your mistake"

- Bill Gates, American Business Magnate ( Microsoft Corporation)

"Earning in simple terms, that your Spending should be lower than your income and saving a some percent on that(income) to earn. "

This will help you to give an additional (or) secondary source of income.


Suppose, you have owned a Home to live and you want an another one. If your plan for the home is to Rent, then it's your choice and may create secondary income. Else, it's absolutely ridiculous. Many of us taking a loan for their second home and they are thinking that they are good on Saving Taxes. You have to be know truly that, you are spending your hard earned one for your second home. We must aware about the building depreciation, maintenance, insurance and taxes. Your second home may benefit for the Government to earn taxes or good for the House plumber for their maintenance fee :)

If you have a second home for rent, you should know the Rental yield which is satisfy or  not.


For Example:

Your Home Value:   ₹ 50,00,000 /-
Rent per year:          ₹ 1,50,000 /- ( 12,500 X 12 months, after cutting the maintenance)

The Rental yield is at 3 %  per annum


Suppose, if you are going to invest in a Bank FD - 1 Year, which gives 6 % p.a. instead of second home.  then,

your earned interest income ( 1 Year):  ₹ 3,00,000 /-   [ ₹ 25,000 X 12 months, before taxes ]

Which is more than your second home and Zero work here on FD.  You can now think about the other instruments which gives more than bank deposits.

Had you kept the Gold, in Jewels or any size of other type. is it earning for you ? It may appreciate on price in the market, while you sell. We also keep the gold in physical for so many years, without earning a single rupee. It's not an asset, but an expense. What's your earning yield on your physical gold ?


Suppose, if you are started a business with an investment of ₹ 5 Lacs and your monthly business expense at 2,000 and getting an income of ₹ 10,000 /- , then your monthly income cash flow from business is at ₹ 8,000 /- (10,000 - 2,000). If you sell that business in future for a particular value it may appreciate (more or less). Some times, may your customer or retailer not paying after getting the product from you. It will also make delay on your monthly cash flow. So, What you have got in your account on that period is meant an earned cash flow.

Investing a part of your income to grow regularly. Your regular cash flow meter is on your regular savings or investing. Keep it on systematic.  I recommend you, that you can try the Rich Dad Poor Dad's  CASH FLOW CLASSIC game (Web / Google playstore) - The game about investing. So, you can get a better idea on your income, savings, debt and understand about the Cash flow meter.

Start  your meter with postal savings, bank deposits, stocks, mutual funds, realty, or any regular cash flow offer...

RICH INVESTING 

The Sharp Knife cuts (hurts) your dream - Inflation

The Sharp Knife cuts (hurts) your dream -  INFLATION

Can anyone tell, 'Why your dreams never come true ? "  OR  Not always ?


I am always start with a caution and raising questions myself. Even starting an article with a question in this blog :-)

No need to worry (or) stop, but we have to ask question by ourselves, with a word, 'CAUTION'. We are having the fixed habits, but not having a flexible one.

• We go for the School Education
• We go for Graduation
• We go for Job
• We go for Wedding
• We go for Kids
• We go for teaching the above to our kids
• We go for Retirement

and finally, we felt bad that something we are not achieved (or) not happy with what we had / did.

Why... ?

On our school and graduation days, we have so many dreams and likes to get. Then, we think that we can get after our job (Day Job). But, that is the area, we don't have a flexible one. We go for a job, We Spend... Spend... Spend... on our money, not with our precious time ! The time is the matter that can take us to get our dreams and likes on Live. But, we felt badly and go with a fixed one. We have a dream like buying a fancy Car, Apartment, Foreign Trip, Giving a Rich Dinner for your friends. Then, What ?

We just spending, but not achieving for our dreams and likes. Because, we are getting a salary or a single income from our business(Self Employed). We also hanging with our Increment, Promotions, Bonus Pay checks. Even sometimes begging with our Employer(s). We have to understand primarily that the Increment, Promotions, Bonus are giving just for your time or work to the production. If the company make profit, they will do the above for your work or time. Not for you :) The Employer(s) also an individual, if he wants a robot (Automation) for his production, then he can. Really Not for you :) They no need to care about you always, but sometimes. They really need their growth of the company or Government. We think that we don't have a precious time, that's why the employer providing you the PF (Provident Fund), Medical, Insurance, Pension and Gratuity Benefits (We think). So, we also saving a little with our salary. But, we can't get our dreams with that little one. 

Of course, they are providing you some monetary benefits, but they could not save you from the Sharpe Knife.

The Sharp Knife - Inflation

Can you think again, why the Government or Employer giving you the monetary benefits like Increment, Promotion, PF, Bonus,etc ?  They just protecting your work and time from the sharp knife, called Inflation. They can survive ! If the employer is going as a defaulter, some one can undertake their business. Even the Government going on bad debt, they can print more currencies to protect them, then what about you ?  

Inflation just eats you and gaping you from the dreams and likes of yours.

"Inflation is an increase in the cost of living due to rising prices of daily needs. It also being decline in the purchasing power of your money”. 

Work and time for the production; Demand and supply for the inflation !

Usually on many occasions, we plan and save for our buying a Car, Home, but the cost of living (Inflation) rising and beating us. Then we go for the EMI, Loans, debt, etc. Finally, we entered into the Rat Trap, the knife hurts you more. And you too asking your kids to do the same, what you did !

We need a solution with the trap, A Flexible one like a Government (or) Employers' business. We mostly thinking that 'Taxes' are the enemy for us. Taxes is also a good one for us, to improve. Taxes is not a matter, so that we can do saving and investing for the best one. We have to save and invest regularly with a small amount, but take a plan that beats Inflation. May be your Goal (or) Dream is for a short term, 5 Years or 15 Years, you must create the wealth more than the Inflation is important.

• Don't hang yourself under the knife.

• Don't buy cheaper products on Insurance and Investing, and don't confuse with the two (Insurance and Investing) also.

• Try to learn and understand the investment products and its risky that beats the Sharp knife (Inflation).

Knife is not on your hands, but Life is :)

source: tradingeconomics.com