Business Tips

REAL Long Term Wealth

Real Assets mean your wealth compounds and grows – without you working for it!
I was trained as a Chartered Accountant (CPA) and I still hold that qualification. I also have a first class honors degree in Accountancy. So you could say I was well qualified to give advice on accounting.

However, what you are taught in:

  • School accounting classes;
  • Small business classes;
  • University accounting classes;
  • On the job accounting and book keeping;

is almost exactly the opposite of what you and I need to know about our own personal finances.

For you and I accounting for our own personal finances is simple:

A real asset is anything that:

  • Puts money into your bank account; or
  • Increases in value; or
  • Is cash; or
  • A cash equivalent.

A liability is anything that takes money out of your bank account.

Sounds simple doesn’t it? So you shouldn’t be surprised when I tell you:

  • Your car is a liability.
  • Your home is a liability.
  • Your boat is a liability.
  • Your holiday house is a liability.
  • Your TV is a liability.
  • Your pool is a liability.
  • Your mobile phone is a liability.
  • Your pet is a liability.
  • Your household furniture and furnishings are a liability.
  • Your hobbies are a liability.
  • Your vacations are a liability.
All of these cost you money. They all take money out of your bank account. Even if some of them don’t do it every week (e.g. your furniture), they all need to be replaced, so over time they cost you money.It is vitally important we realize these are real liabilities that are causing huge amounts of money to disappear from our lives. You might rightly argue that some of these are necessary for living and I agree with you. But almost everyone in the industrialized world falls into the trap of buying bigger and more expensive than they need. And then of course acquiring all of the other paraphernalia we don’t actually need. You only get to spend money once!
 
Tip #1 Your Assets
 
Write out on a piece of paper or a spreadsheet all of the Real Assets you own. You might be surprised to realize you have none or very few. But that is a great realization and a good place to start.
 
Tip #2 Your Liabilities
Calculate how much your Real Liabilities are costing you every week, every month, every year. You are likely to be shocked how much money is pouring out of your bank account to pay for all of your liabilities.
 
Tip #3 Make a Change
 
Make a radical change now so that you store up wealth for your future. Change your expenditure from funding liabilities to buying real assets that will continue to gain in value over the years. This change could literally lift your level of future wealth by hundreds of thousands of dollars.

I look forward to helping you improve your Lifestyle.

 Oli Hille

Author

“Creating the Perfect Lifestyle”

Advertisements

One thought on “REAL Long Term Wealth

  1. Great tips Lynn! My husband is a CGA so he has taught me a lot about liabilities and what an “investment” is (and it’s not when I buy a pair of fabulous boots half price! which I always thought was a GREAT investment…LOL)

    Laila

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s