Personal finance books and websites discuss about risk
appetites in engaging into investments suitable for our own personal short-term
and long-term needs. It has been a
wonder to me what the “proper” asset allocation would be for all assets
available in the market: equities, bonds, cash, and alternative assets (such as
real estates, and businesses). I believe
that part of managing our personal finances is creating a system to where we
would like to put our assets on that would give us passive and earned income in
the coming years.
While I embark on this road of personal finance, I did
the following (and those that I should have done) which I hope would also help
you guys in how to properly manage our assets:
·
Financial
Budget – For most of us who derive our income from our monthly
salary, we all know how much our monthly income is, net of government fees (ie:
taxes and social security). By knowing
how much we “actually” receive each month, we would be able to determine how
much we allocate from our salary going to other assets (ie: equities, bonds,
bank deposits, etc.) that can generate other income. As always personal finance management starts at
this stage.
·
Financial
Forecast / Projection – The Internet has provided us ready
information with just one click of the mouse.
Financial statements of listed companies are readily available in their
websites, thereby giving us a chance to study their financial performance if we
want to be part of its shareholders.
Banks and mutual funds have summary of their earnings during each
quarter/year that would give us hint on how much is the average % of income
they earn. The question is: how much do
we want our money to grow? If we are
able to have an answer for this, then we would be able to decide where we would
like to put our money to invest into.
·
Financial
Risk – This is always part of life. We have to do our own due diligence through
study and research of investment/business ventures that we want to engage into.
Asking people who have similar experience
(ie: looking for a financial mentor) is one step ahead to manage risk.
·
Financial
Terms – As part of our own decision to manage our finances, we
have to get ourselves familiarize with the financial terms going on in our
environment. Reading financial books is
FREE anyway. It is by the books we read and the words we use that influence how
we deal about with our daily life. Do we
want to take good care of our assets and finances? Then, study the financial
world. (It’s not too complicated - it is
just simply learning what cash inflow, outflow and other financial terms are.)
*winks
·
Fire
and Aim on It! – Actions speak louder than words. What’s the use of this nosebleeding financial
lingo I’ve been talking above if no actions are taken? Go out there. Invest. Learn. And share those
blessings to the world. =)
- -
There goes. It’s the accountant in me who is talking
about those stuffs above. J
Keep learning and keep on moving forward!
Cheers,
Lyn-Lyn \(",)/
Lyn-Lyn \(",)/
No comments:
Post a Comment