Time Management

Hello, guys! I'm finally back again. Well, after a few months of resting from writing, I decided to write again and share with you some lessons I have learned while trying to shake off the writer's block (Wew!). Anyway, I just want to tell you that I got addicted to an online game. And it's not just something that I want to channel all my frustrations, but I got addicted hard. I know it's so embarrassing to admit this--considering that I should be encouraging you guys on how to use your time in a productive way--but I have to do this. One of the things that I want to point out is that, when you get addicted to something (when I say something, I mean things that hurt you rather than help you) you not only spend your money but you also spend your precious time that you'll not be able

to bring back. Yes. That hurt me more than the money I should have allocated in a wiser way, like business etc...

Time is something that you can not afford to waste. So whatever you are doing now, you should ask yourself, "is this thing helping me or not?". Because if not, then your are missing better opportunity for you to get to the next level of your life. If you are not aware, let me tell you that there are thousands of opportunity for you to get one step educated than a university student--who burns a lot of money only to find out that the kind of education they are getting are all available on the net. And it just takes your finger and the mouse to access wider and better shared-knowledge.

Let me get this straight. I'm not against going to college but, like me, there are thousands or even million of people who cannot afford better education because its price is not cheap. That's why I'm very thankful to some people who do not hold back on sharing what they've learn and not asking for anything in return. That's what you call free knowledge. Knowledge should be shared and not

marketed. I believe.

Right now, I finally learn how to manage my schedule and not be focus on just one hobby of mine (this is my problem sometimes that's why I get frustrated) but to experiment and try out different facet that I know will contribute to my well being as I continue to learn more.

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Assets and Liabilities

 WRITTEN BY: Ednan Orallo

In this post I’m going to show you why it is important to understand what‘s the difference between an asset and a liability. This will help you see that not everything you buy should be called an “investments for your future”. Whether buying a simple gadget, or deciding to buy a car, and even buying your dream house. These are good investments for some, but is it really the “right” investments to go for?

What is SAL?

SAL stands for Statement of Assets and Liabilities which simply means: Your net worth. You can determine your net worth by preparing a balance sheet where you will put everything that you own in the asset column and all your obligations (debts) in the liability column. Next is to put the corresponding amount of each entry and get the total of the asset column and the liability column. Computing the difference between the two will result your net worth.

I will not go into the details of what you should list in your assets column and liability column, but basically, everything that you have/own; bank account, receivables, house, car, appliances, etc. go to your asset column and your debts, mortgages, credit card bills, insurance, payables, go to your liability column.

You see, the definition of asset here is EVERYTHING that you have that belongs to you. This has been programmed in our mind that whatever we buy in the market becomes an asset to us and goes directly to our asset column. But if we really look closely, some of the things that we considered an asset are really a liability in nature. 

What makes an asset a liability?

Let’s take the example of buying a high-end gadget. You considered this helpful for the kind of work you have. It helps you in many ways. In fact, you even upgrade its memory card, or buy apps, you spend 20% more dollars just to maximize its potential. And because of that, you list this as part of your asset. But after a couple of years, the gadget you bought is not in it’s optimal performance, and the external features are not of the same as it used to be. When you prepare your SAL it’s more likely you’ll not put the same value to it as when it was newly purchased. Its value depreciated through time, thus, it becomes a liability in the long run.

How can you call something an asset when, in fact, it cost you more rather that benefit from it? Anything that needs high maintenance and depreciates in value is a liability in nature. Appliances, cars, or even your house could be a liability instead of being an asset to you. If you  prepare your SAL now and you just happen moved to your new dream house with a brand new car, your net worth may be high in value. But after a year or two, your car's value depreciates, worst the location of your property is not good, and you have unsettled mortgage and bills to pay. You’ll be shock to see that your net worth relatively dropped and marked negative. What’s worst, if you don’t do something about your “assets”, it will pull down your net worth even more. 

What makes an asset an asset?

It is very important to study first, before buying something, whether it will be an asset or a liability in the long run.

Our mind should be conditioned that if what we are to purchase is not an income-producing asset, then it falls under the category of being a liability. Having this in mind, it will not only help us to be wise on where to spend our money, but also correct where to rightly make an investment.

The reason why we don’t want to invest in assets which are a liability in nature is that it will reverse the growth of our net worth. If we want our net worth to increase, the asset column should contain income-generating assets.

What is an income-generating asset?

Income-generating assets are assets that built a person’s wealth. Example of this is owning an apartment. This type of asset produces income on a monthly basis through rentals. Unlike having your own house where maintenance is costly, having an apartment rented will not burdened the owner with maintenance cost because of the income it produces.

That’s why it is advisable to own only one comfortable house to live with your family. And if you plan to buy another, make sure it will generate income to rid yourself off with maintenance cost.  

It also applies to having a car. The value of a car does not appreciate through time so you have to be wise enough that instead of buying more than one car, why not invest your money into something more that will help increase your net worth.

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