Personal Finance Basics
Upon hearing the term ‘personal finance’, it makes many blood run cold. “Uh No, what should I do? Here it comes . Too much month left at the end of my money and I have yet to save enough for retirement or my children’s university.” And at the end of every work year, submission of tax rules and procedures are so complicated. Insurance policies and contracts are so complex that you perhaps hardly understand the reader-friendly washed down version even with many fanciful graphs and charts displayed. Adding on to that, the complex mathematical mysteries of interest, ROI, making money worth more with less time spent is increasingly becoming an ‘Einsteinian concept” that requires a genius mind to work them out.
Worry no more, unless you are born with a silver spoon in a financially blessed household (and most of us weren’t), dealing with personal finance works in two ways. First: Uncover the consequences and scary realities should you run out of money. Second: Shift the burden of YOUR financial planning to the bank officer, insurance agent, financial planner, stockbroker or accountant down town (which you might end up leaving in a state you went in after listening to 50 minutes of incomprehensible stuff.
The following section covers the basic elements and philosophy of personal finance and financial planning.
Separating the two words – Personal | Finance;
Personal refers to you, your family, household and people who matters to you.
Finance concerns money, the management of money in earning, saving and spending.
Using Robert T. Kiyosaki’s Rich Dad, Poor Dad series as a fundamental reference, there are four quadrants prosulated in his book. Income, Expenses, Assets and Liabilities. The difference between Income and Expenses (net savings) ensue Assets or Debt. The net worth between the two is good if positive and bad if negative.
Therefore, personal finance essentially comes down to managing the four quadrants of your financial life
The Author currently manages a Wealth Management / Investment / Financial Management Tips Blog named – Moneypapa.com
Author: Yevgeny David Eve
Article Source: EzineArticles.com
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