At yesterday lunch meeting at Nex with one young undergraduate; he may have realized and re-learnt something differently from the book: Rich Dad, Poor Dad that he has read many years ago.
TGIF lunch is expected to be longer but still shorter to gain more insight!
Time up and back to office!
Posts
CW,
ReplyDeleteBalanced or middle way indeed.
Some focus too much on cash flow and ignore asset value. I scratch my head whenever I hear: "Oh, just as long I got my dividends, I don't care if my stock goes down 20-30%."
Some are so asset rich, like living in landed property, but don't have the cash to pay for medical bills and struggle with day to day living...
I also like your highlight of human asset and financial asset.
Financial asset can be lost or stolen, human asset once developed is a lot harder to depreciate - unless you got dementia...
It is simply financial common sense where should young investors focus on. Yet too many of them just don't get it.
DeleteHope that this young undergraduate will get that common sense right out of an old horse's mouth chewing on crispy Teppanyaki chicken.
CW,
DeleteBy the way, you daughter may roll-eyes when she sees you topic headline. LOL!
I will support you - Focus on the moral of the story ;)
It's something we can sing song to the young - don't focus so much on grammar and spelling that you forget the moral of the story!
(OK, OK, I am bad influence. English teachers, I beg forgiveness!)
Oops. Can still amend with no penalty. LOL!
DeleteAgreed haha! Balance not easy.
DeleteHa! Ha!
ReplyDeleteWealth = Asset Value + Cash Flow is correct only provided CF is positive even when Asset Value is status quo. This usually means Asset Value has been protected and Liability has been reduced or has been off-seted by CF.
So if i can manage my Liability and protect my Asset Value, both of this action hopefully can generate enough positive cash flow to increase my Wealth.
But this is only theory. How put into practice neh? Your action may differ from mine. But hopefully we all arrive where we want to go to.
To me, managing Liability should precede any other financial actions. The NO 1 action to always look out for before talking about any other thing, financially.
Shalom.