Photo: casper somia

What are the 4 pillars of money?

The four components are Assets, Liabilities, Income, and expenses. Managing all four components will not only keep you debt-free but also help you attain financial freedom, as said by Rob Berger “The Best thing money can buy is financial freedom”.

fintoo.in - The Four Pillars of Personal Finance - Fintoo Blog

What color front door sells a house?

In Zillow's survey, a black front door raked in the highest offer price. On average, the prospective buyers said they'd pay $6,449 more for a home...

Last updated Jul 6, 2018

What should you not carry?

Baggage tips and restricted items Banned Items. ... Items Which Cannot Be Carried In Hand Baggage. ... Sharp Objects. ... Sporting Goods. ... Guns...

Last updated Apr 24, 2019

Awaken your dormant DNA ability to attract wealth effortlessly

The simple yet scientifically proven Wealth DNA method laid out in the report allows you to effortlessly start attracting the wealth and abundance you deserve.

Learn More »

Promotion

“The Journey of a thousand miles must begin with a single step” – Lao Tzu. The single step of analyzing your four pillars will help to provide you with a framework to manage money. Managing money has become the need of the hour. Today youngsters find this as the most difficult task unlike earlier. Irrespective of our income, age, wealth, investment, credit card bill, and other factors we all fit into a common framework called “The Four Pillars of Personal Finance” The four components are Assets, Liabilities, Income, and expenses. Managing all four components will not only keep you debt-free but also help you attain financial freedom, as said by Rob Berger “The Best thing money can buy is financial freedom”. Let Us Now Move To The Four Pillars of Personal Finance And Understand Each Component In Depth.

Assets

Assets are resources that can be converted into cash within a period of time, however, the turnaround time highly depends on the nature of the asset. Assets are divided into different categories like current assets, fixed assets, tangible, intangible, and operating and non-operating assets. For instance, a house is a tangible asset and even the share that you own is termed as an intangible asset. They both differ in terms of liquidity where shares can be sold quickly and converted into cash, while the house might take a little longer. Assets also serve as one of the inputs and help increase the net worth. You can list all the assets and add them up to understand your current worth. Getting clarity on your varied assets is the first step to attain financial freedom. Assets are considered to be one of the strongest components of finance. Why so? It is because this is the only component that gives you strong financial support. The more the assets the more the net worth unless you have more liabilities. Most of the Assets appreciate on their own with time. Some are short-term, few others may be long-term. For example, A house may take longer to appreciate, whereas shares might give you a short-term appreciation. It all depends on the nature and type of asset.

Liabilities

In simple terms, Liabilities refer to the money that you owe to others. Many of us fail to understand the basics of debt management and end up being in debt. Liabilities are opposite to assets and include all the accounts payable. Eg. Student loans, credit cards, bills payable, Mortgages, and others. In addition to this also the interest accrued on all these liabilities will be considered liabilities only. Basically, interests are considered to be indicators of the cost of debt. The higher the credit score the lower the interest rate. Liabilities aren’t always bad! Especially when it is incurred to create an asset like a house or educating yourself. You should always decide on an upper limit when you consider debt as an option of financing. The goal should be clear that the assets have to be increased over a period of time. Sometimes it might be difficult, but you should stick around it to achieve your long-term goal. Being debt-free is the new rich. Once you identify all your liabilities the best step is to design a debt reduction strategy that will help you gradually pay off the debts and build assets in the long run.

What does a 7 second hug mean?

A 'seven second hug' takes you to level two – it's a sincere, genuine transaction of love and care. Level three is the 'run up hug' – a euphoric,...

Last updated Mar 7, 2021

What is good luck money?

To celebrate Chinese new year 'luck money' is handed out by adults in traditional red envelopes to unmarried juniors – the Hongbao (red packets of...

Last updated Dec 15, 2021

Promotion

Income

Income refers to all the money that one generates within a period of time. You can calculate either monthly or yearly. Though a monthly calculation is suggested to manage the cash flow, keeping a track of income and expenses will help you achieve short-term goals. Income can be categorized into two parts, First Disposable income, and second discretionary income! Don’t know any? Let us understand both terms. Disposable income is basically income/ money that is left after paying the taxes to the government. This money is used to pay for our day-to-day necessities. Discretionary income is something that is left after paying for the necessities. Hence, Income minus disposable income gives us discretionary income. Discretionary income can be either saved or spent on luxury. You can also use it to pay debts. Therefore, you should use this income wisely and not land up spending unnecessarily. You should try to increase your income streams. Try building more sources of income that are passive in nature along with active income. For example- one can get into blogging, freelancing opportunities like teaching, etc. Additionally, you can earn income from investments like rental income, interest income, capital gains, etc. There are many options that you can explore only if you are creative. An additional source of income will always keep your balance sheet positive and help in building your net worth. So, start exploring new sources!

Expenses

It refers to the cash outflow. All the money spent within a period of time that will not generate any revenue is called an expense. Expenses are necessary to run our day-to-day activities. It is advisable to always keep a track of your monthly expenses so that you don’t end up spending more. Recording expenses is a must so that you can check the estimated amount with the actual figure. Tracking your monthly expenses can be a daunting task. You can use an application for the same. Limit your credit card use to avoid unnecessary expenses. Make use of discounts, offers, vouchers, and others while making purchases. Try building a fund for emergency or sudden expenses so that your savings are not hampered. Your financial stability depends on expenses, the more the expense the fewer savings and vice versa. Hence, in order to build a strong financial worth, you need to keep expenses under control and also keep a proper check on them regularly. As said “A penny saved is a penny earned” I am sure by now you must have understood the four components of personal finance clearly. Implementing it in day-to-day activities is a must to achieve long-term financial freedom. Assets and liabilities will automatically be aligned once the income and expenses are in check. Monitoring all four components will help you analyze your current status and help in planning your long-term goal. Long-term goals can only be achieved with short-term achievements. So, plan and strategize your financial freedom from today. A small step can bring wonders in attaining your retirement and financial freedom on time.

When Pisces is angry?

A Pisces is always a thunderstorm of emotions and they can be quite self-destructive when they are angry. Most often they go into this passive...

Last updated Nov 19, 2022

What is the top 10 highest paying job?

Top 10 Highest-Paid Jobs in the U.S. Oral and maxillofacial surgeons. ... Anesthesiologists. ... Surgeons. ... Obstetricians and Gynecologists. ......

Last updated May 21, 2021

Awaken your dormant DNA ability to attract wealth effortlessly

The simple yet scientifically proven Wealth DNA method laid out in the report allows you to effortlessly start attracting the wealth and abundance you deserve.

Learn More »

Promotion

A financial planning platform where you can plan all your goals, cash flows, expenses management, etc., which provides you advisory on the go. Unbiased and with uttermost data security, create your Financial Planning without any cost on: http://bit.ly/Robo-Fintoo Disclaimer: The views shared in blogs are based on personal opinion and does not endorse the company’s views. Investment is a subject matter of solicitation and one should consult a Financial Adviser before making any investment using the app. Making an investment using the app is the sole decision of the investor and the company or any of its communication cannot be held responsible for it.

fintoo.in - The Four Pillars of Personal Finance - Fintoo Blog

Which planet is responsible for rich?

Venus represents wealth or money as it rules the second house of wealth in the natural zodiac. Sep 4, 2021

Last updated Oct 27, 2022

Where should I invest $30000 right now?

Stocks & ETFs Unsurprisingly, one of the best ways to invest $30,000 is to invest in a variety of stocks and exchange-traded funds (ETFs). This is...

Last updated May 25, 2021

Awaken your dormant DNA ability to attract wealth effortlessly

The simple yet scientifically proven Wealth DNA method laid out in the report allows you to effortlessly start attracting the wealth and abundance you deserve.

Learn More »

Promotion

Which zodiac is wife material?

Top 4 Zodiac Signs That Are Best Wifey Material Taurus, Cancer, Virgo, and Libra adore being in a partnership. They'd do anything to see their...

Last updated Jan 19, 2018

Awaken your dormant DNA ability to attract wealth effortlessly

The simple yet scientifically proven Wealth DNA method laid out in the report allows you to effortlessly start attracting the wealth and abundance you deserve.

Learn More »

Promotion

How do I know if my house air is clean?

Indoor Air and Dust Buildup Another way to tell whether you have poor indoor air quality is if you see dust buildup around your home and collect...

Last updated Mar 9, 2020