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.
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