Financial Intelligence - Do You Have It?
The rich and successful stand out from the rest because of
their Financial Intelligence education, not their
scholastic education. This is something that we are not
taught in school but rather something that is acquired.
To give you an example:
Is your home an Asset or a Liability?
The general consensus is that it is an Asset. But is it?
To answer that question we must first understand the
difference between Asset and a Liability (financial
intelligence).
Simply put:
"An Asset puts money into our pockets."
"A Liability takes money out of our pockets."
Knowing these two basic rules of financial intelligence
lets re-visit the question.
Is your home an Asset or a Liability?
1. Every month we make a mortgage payment - (Cash flows
out).
2. We pay yearly taxes on our property - (Cash flows out).
3. We have to pay for repairs - (Cash flows out)
4. When the mortgage is paid we still have to pay the other
two - (Cash flows out)
As you can see, if you buy a home, cash will always flow
out of your pocket. Thus your home is a Liability.
Does this mean that we shouldn't buy a home? No, not at
all.
The point that is being made is that if we wish to be rich
(or wealthy if you are uncomfortable with the word rich)
and successful we need to understand how to accurately
distinguish Assets from Liabilities.
Most people spend a lifetime acquiring Liabilities rather
than Acquiring income generating Assets. The rich or
wealthy spend a lifetime acquiring income-generating
assets and purchase liabilities that work for them instead
of against them.
An interesting fact and one that seems to be a stumbling
block for most people is that you don't need to be rich to
acquire income-generating assets. 80% of today's wealthy
had nothing when they started. The other 20% inherited
their fortunes.
So, if you desire to be wealthy there are two basic things
you have to learn how to do:
1. Continually acquire income-generating assets (cash flows
in). It does not matter how small they are when you start.
Over time assets will build up.
2. Learn to acquire Liabilities that work in your favour
and not against you.
"It's not how much money you make, its how much money you
can keep that counts. There is always hope for those that
help themselves"
MIND YOUR BUSINESS
***********************************************************
Winston (Kip) Scoville is the owner of MKOPPS Small
Business Resources website. A site dedicated to helping
people grow successful businesses.
http://mkopps.netfirms.com***********************************************************
