Many wage earners have a very difficult time controlling Expenses which actually grow more rapidly than the increases their employers are willing to give. Thus, very little cash surplus (or worse, no cash surplus at all) is generated.
The best way to control Expenses and actually SAVE some amount is to spend money on an […]
Even if you do not need to borrow to cover Expenses (especially if you are generating a Cash surplus), it is good financial strategy to borrow anyway and pay on time. Borrowing –when you know you can pay on time– establishes your credit rating and improves your credit standing. With a […]
The most obvious way forward for individuals or households with no Earning Assets as can be seen in the relationships among the Personal Balance Sheet, the Personal Income Statement, and the Personal Cash Flow Statement:
is TO SAVE; i.e., to make sure that your Manhours generate enough of a Salary or Professional Fee to cover sufficiently […]
Consider the case of an individual or household with no financial or physical Earning Assets, whose only Earning Assets are Manhours, where the Salaries or Professional Fees have related Direct Costs which do not leave sufficient Cash to meet Expenses:
In the previous post, we started by first looking at the possibilities of maximizing Manhours or […]
Considering the case of an individual or household with no financial or physical Earning Assets, whose only Earning Assets are Manhours, where the Salaries or Professional Fees have related Direct Costs which do not leave sufficient Cash to meet Expenses:
What are the possible options for solving the financial problem?
The options start with your Manhours, your […]
A personal or household Budget is useful in ensuring that you or your family do not live beyond your means. However, a Budget is not adequate in clarifying the financial issues confronting an individual or household. Personal Financial Statements will make clearer where the financial problems lie and how best to solve […]
The Personal Cash Flow Statement of an individual or a household with no financial or physical Earning Assets (whose only assets are Manhours) will look as follows:
Inflows will come from Salaries &/or Professional Fees. If he takes out a Loan to cover Direct Costs & Expenses that cannot be covered by Salaries or Professional […]
There will be less items in a Personal Income Statement with no physical or Financial Earning Assets. The only source of Revenues will be Salaries and / or Professional Fees.
Direct Costs will be the expenses incurred in earning the Salaries and / or Professional Fees; i.e., Transport to / from Work, Meals at Work.
Expenses […]
In PERSONAL FINANCE 3 (A PERSONAL BALANCE SHEET WITH NO EARNING ASSETS), we discussed the case of a person without any physical or financial Earning Assets. In this case, we presented the possibility of Manhours being an Earning Asset and the only Earning Asset.
The Manhours are valued at the salaries and / or professional […]
In general, you derive your Revenues from your Earning Assets.
The costs of maintaining your Earning Assets (Repairs & Maintenance, Depreciation, Property Insurance & Taxes, Investment Charges & Fees, etc) are Direct Costs. It is important that you know how much you are actually making (i.e., Contribution to Personal Overhead) from your Earning Assets by […]
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