Do you know the difference between offline trading and online trading tips? Here Rapids Tips differentiate offline trading and online trading with it's benefits. Contact now!
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Do you know the difference between offline trading and online trading tips? Here Rapids Tips differentiate offline trading and online trading with it's benefits. Contact now!
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What is object based investing?
Do you recognize the variation among the assets you own and liabilities you owe? Do you recognize own monetary targets and how to attain them in a time-based way?
If I were to write a book on private investment, private health, diet, I would love to call the book 'Take Charge'. Purely because that is precisely what you want to do with own health and/or own investments. Also only when you take Share of the present circumstances (i.e. compose own balance sheet) would you recognize how much you have in assets and how much are own liabilities.
What is a balance sheet?
If these noises like complex terms let us call it a report of assets and liabilities!!
Assets
These are stuffs that you own and for which there is a sound market worth. If you have several old watches and pens that own huge grandfather used, it is expected to have no commercial worth. So all the mutual funds, life insurance policies, your bank balance, own demat account balance, house, car, white goods, etc. are all own assets. Don’t forget your PF account, etc. too.
Once you add all this, the total that you appear at is the TOTAL assets that you have.
Now if you have funded all these buys OR some of the assets, the money owed on that is called own LIABILITY (LIABILITIES in plural).
What goes into the asset face is the present worth of own mutual funds (if you do not have the market worth, please get the report from own mutual funds), the bank balance, the maturity worth of the bank fixed deposits, the present worth (approx) of the life (endowment) policies, the market worth of the equity Stocks and an approximate worth of own house given on rent (you ignore the house in which you are living -- that is an custom asset like own car).
THESE ARE THE working assets that you have -- the monetary assets that are working for you.
Assets like home, car, golf kit, watch set, etc. are own USAGE assets. These aren’t 'working' towards own aims.
Liabilities
We are discussion on all own small period liabilities (unpaid credit card), private loan, travel loan, car loan, home loan, etc. All these stuffs go to the liabilities face. Now if you deduct own liabilities from own assets the figure that you get is called your Net value.
Once you recognize own net-worth (balance sheet tells you where you are monetarily), you must then make own 'Goal Sheet' (where you want to go), then see how much you are earning and how much you are spending (Income & Expenditure account), then you make the 'Cash Flow' statement (how much of cash you received and how did you use it).
ONCE you have all the 4 documents (properly filled up) you would recognize:
a) Own net worth
b) Own income and expenditure
c) The journey - the monetary plan which tells you how to go from 'where you are' to a 'where you wish to be'
What you have done now is just taken charge of own monetary life! So go and take fees!! This is own 1th step in goal-based investing. Report by Swastika Investmart Stock Brokers & Brokerage House India