Time Freedom, Geographical Freedom and Financial Freedom

We had went through some keywords in previous article: YOU Are the Golden Goose! Are You? :
Active Income, Passive Income, Income Streams, Golden Goose, Cash Cow.

Before we go into The Rich’s Playground, some other important keywords here are:
Assets & Liabilities, Cashflow, ROI (Return on Investment), Leverage

Regarding assets & liabilities, Robert Kiyosaki, the author of Rich Dad Poor Dad has his own definition in layman term, which I agree to:

Assets is something that put money into your pocket,
Liabilities take money out of your pocket.

Assets feeds you, liabilities eats you.

However, it is important to understand good debt, bad debt, good liabilities, bad liabilities as well.

Cashflow : Cashflow to our financial status is just like the blood to human body.If you have enough cashflow, when opportunities come, you can seize the chance and make the most profit out of it. Enough cashflow will also reduce your cost of funding.

ROI (Return on Investment) : In finance, rate of return (ROR), also known as return on investment (ROI), rate of profit or sometimes just return, is the ratio of money gained or lost (realized or unrealized) on an investment relative to the amount of money invested. The amount of money gained or lost may be referred to as interest, profit/loss, gain/loss, or net income/loss. The money invested may be referred to as the asset, capital, principal, or the cost basis of the investment. ROI is usually expressed as a percentage rather than a fraction.

Leverage : To better understand leverage, using image is a good idea.

To date, I found that the internet is the best leverage tools ever created.

The keywords being discussed here are just the very simple and basic illustrations.

Please do your further study from here. For example, you can google what you are looking for or check out wikipedia.

Related Notes:

How Fast Is Your Money?

Go to School or Seminars?

This entry was posted on Sunday, February 15th, 2009 at 1:55 pm and is filed under Freedom. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.