Net Worth Archives - MoneyWatch101

What is Wealth

This post will be a short one as I am swamped with work and in addition have crazy demands on the family front. It will be about the best topic in the personal finance world to discuss, and it is called what is wealth.

Wealth has been defined by Investopedia as: A measure of the value of all of the assets of worth owned by a person, community, company or country. Wealth is found by taking the total market value of all the physical and intangible assets of the entity and then subtracting all debts.

If you do this money management exercise it will reveal a positive number and you might be ecstatic. On the flip side for some, it will reveal a negative number, and a feeling to turn things around to eventually bring things on the positive side of money.

Now I leave you with what is wealth to me and hopefully you can relate to how I described wealth below in Acrostic writing style.

Continue reading What is Wealth

Will you Achieve Financial Independence

Well you guessed it, as I am talking about reaching financial independence once again. I am posing this question today, will you achieve financial independence before age 65? Well the jig is up and there’s a ton of examples online of people who actually reached the imaginary Financial Independence before getting grey hair.

This is my goal and it should be everyone’s lifetime goal also, because long gone are the days people worked for 40 years dedicated to a job who can easily replace any of us with the next person. Granted I am not telling you to stop working forever, I am just advising you that you can work on your terms when you reach this next stage of life. What a fun stage it can be, don’t you agree?

Below is the list of bloggers who already reached Financial Independence.

Continue reading Will you Achieve Financial Independence

The Frugal Millionaire

Ok so I know many people think once someone reaches millionaire status that they can begin to purchase a brand new Mercedes every two years just to live the good life. But that is not the case as most average millionaires actually care more about staying low key and remarkably maintaining the wealth they worked so hard to build.

Now I bet your asking why are they being so frugal if they are actually millionaires. Why don’t they just spend all day like the average tourist on vacation. Well if I were to give you an off the cuff answer, it would be because by that point in life, the average millionaire is already older and a bit wiser with how money management works. They also prefer to value every dollar and the opportunity it can bring in future revenue.

This usually equates to the average millionaire believing in the live modestly lifestyle, and is way past the, drive a Ferrari on the weekends because that makes me look cool syndrome.

Continue reading The Frugal Millionaire

Do you want to Be Rich?

Do you want to be rich

There’s no secret sauce to becoming rich or maybe there is, and let me explain why below. Do you want to be rich? If the answer is yes, you may want to pay extreme attention as I’ll outline all the steps to getting the illusive first million. I’ve read many times in hundreds of websites, that in order to be rich you have to do these 3 things:

Pay yourself First

Spend Less than you Earn

Have and Maintain a High Income

While yes these three factors do matter to the average person who dreams of swimming in the dough like Scrooge Mc Duck, I will tell you becoming rich takes a deeper process and an involved plan. Many people seem to have the mentality that becoming rich is all about luck and or hitting some magical monetary jack pot.

Continue reading Do you want to Be Rich?

Real Estate Investment Trust

This is not a new investment opportunity as it has been around for a long time now. The problem is if you are not into investing and do not read investing books, you probably never heard of this type of investment opportunity. What is a real estate investment trust? Exactly what you might think it is when you read the title. They are companies that invest in real estate holdings, offer shares to investors so that they can own a piece of the pie. This in turn provides the company with the influx of cash to invest into more properties. Now the secret sauce to this deal is that by law these REITS must pay out about 90% of all the income they make back to shareholders. If they make 1 million dollars a year they have to pay out 900K to all the owners. Usually all the dividends are paid out on a monthly time schedule. Now what company you know gives almost all of its profits back to the owners? (None I’ve seen)

I am a big proponent in holding some REITS long-term, as it can provide a substantial amount of income and the ability to diversify nest egg money away from the usual U.S. large cap equities. The REIT market on average provides yields of about 5% and this is not including any capital appreciation on the price of the stock when you decide to sell. For a few examples of REITS in the market today see below:

Continue reading Real Estate Investment Trust

The Truth behind Assets and Liabilities

I think there is a misconception behind what an asset is and what a liability is? The truth behind assets and liabilities is that one puts money in your pocket while the other takes away money. If you question this monetary foundation then please reevaluate the stance on how to distinguish both of these financial terms.

If you can early on capture the real essence of the assets and liabilities game you will succeed with money and possibly have the freedom from worrying about money. The real conundrum that can be simply solved is to ask yourself before a purchase will this put money in my pocket or take away. That shiny new car might seem to many as an asset, but it is really a liability. Why you may ask because you then have to fork over thousands of dollars per year now after owning it that you didn’t have to before owning it. Hence your cash flow is now affected negatively. The costs include insurance, car payments, gasoline costs, maintenance costs. Before you signed on the purchase order dotted line, you never had to worry about having the money for the newly found car costs.

Continue reading The Truth behind Assets and Liabilities

2012 Financial Milestones

Hello I wanted to share with you some milestones I was able to reach in 2012. I want to make this post personal without being to revealing with actual figures. I hope I can pull it off and at the same time make it interesting. What I did matters to me so that I can see where I am headed in the New Year. I am ready to attack this New Year with a vengeance, allowing me to be one step closer to reaching retirement. Now I want all the bloggers who happen to read this to take a look at the milestones below and make a similar post on your website as a challenge. I have a feeling that 2013 will be a great year. If you push yourself for something greater you will almost always accomplish more than your thought you would.

Continue reading 2012 Financial Milestones