Knowledge Towards Wealth. Chapter Outcomes. What is wealth? Secret toward wealth Step-by-step to build wealth. What is wealth?. What is Wealth?. Residuals income after subtracting all expenses Assets – Liabilities = Equities (Wealth, Net Worth) How much wealth you need?
How much wealth you need?
Therefore, to create constant and lasting wealth:
Can be called “Financial Independence”
When you have financial independence:
= income from work + from assets
Survival ratio >1
To increase Survival Ratio:
Increase passive income (income from investment and savings)
reduce your expenses
you take a look at your expenses each month and figure out what you need to make each month to live.
Then set goals in order to move your personal wealth
= income from assets
Wealth ratio >1
Income from Assets:
Income not from working
Other returns on investment
Mr. Adam gets income from work of 50,000 baht per month and income from renting his beach home for 20,000 baht per month. His total expenses per month is 60,000 baht. How much is survival ratio? Is Adam financially independent?
From survival ratio information, Is Adam having financial freedom?
What to do?
“Pay yourself first”
Pay Yourself First Means:
Saving – 10 Strategy
Saving + 10 Strategy
Be smart when you buy:
Be smart when you spend:
Be smart when you live your life:
1. Know your gain/profit and risks of investment
2. Choose what fits your life style
3. Make investment choice that creates wealth
Wealth is built from saving. Why save?
Saving is security
Change of life cycle
Wealth Protection Financial GOALS
Wealth Accumulation Wealthy, Richness,
Depends on how much is used to buy assets
Must invest in assets that will increase in value
Furniture, unless those appreciate over time.