2006-12-20T08:36:00.000-08:00

Business Financial Essentials.
The earnings of a business come from revenue/turnover after paying expenses, interests and taxes and after amortization/depreciation as well. Profit of the year builds from what the firm business earned, it can be retained in reserves, reinvested or paid as dividends to the owners.
Some funds come from outside sources like borrowing, from investors or government subsidies or by issuing shares on the Market.
Is important to keep records of all transactions entries, invoices, bills, payroll. This information about financial matters is kept by a financial manager. This person must make the company’s Balance Sheet and the profit and loss accounts. These accounts are prepared in accordance with accounting standards.
These documents present picture of the business, its assets, the profit and loss, operations and performance. If operating costs and other expenses exceed revenue the balance shows a deficit instead of a profit.

2006-09-08T08:52:00.000-07:00

My Way to Financial Freedom.
I’m convinced financial freedom comes from creating a nest egg of assets that can support your lifestyle with passive income. I can count at list seven key steps to get it:
1. I set up my goals. Simple I made my task to move on and save money, and have savings in the nearest future growing up year by year.
2. I decided to save first. Even when I get a raise at work, it still wasn’t enough to save anything, so I adjust my lifestyle to my needs including savings, I quet the idea to take a home morgage. I desided to take a percentage out of the pay before it is credited to my bank account is a sure way to save. The Government understands our purchasing habits. That is why Tax is taken out by the employer as Pay as You Go (PAYE) and sent directly to the tax department. I looked at myself to be as important as the Government in my life and pay my self first as well. So I ask my pay clerk to put a percentage of my money into a special long term savings account.
3. I took advantage of compound interest, this was where I get interest paid on my savings, let the interest buildup and then get interest on the original sum + the interest. Watching my investment grow requires patience and discipline. Time is the friend of compound interest. I imagine putting $10,000 on an account for a term of 40 years it will grow up at list 20 times.
4. My most important asset is my ability to earn income, and is obvious it needed to be protected. I decided to make it up through income protection insurance. Insurance companies offer different conditions but is important they define “loss of earning” like becoming disabled, dying too soon, living too long.
5. Asset allocation is fundamental safety of investment. The main asset classes are cash, fixed interest, property and shares. All these assets have different returns and risks associated with them. Cash is mare predictable in the short term. Shares need a longer time frame to move through the economic cycles. I stick with diversification across the four asset class to spread my risk.
6. I considered leveraging, buying a house and borrowing against the asset to earn quick at the favorable market. It was a risk but came up successful.
7. So, I’m still in my way but year by year closer to become a millionaire even I’m a dozen years away from retirement and now I’m considering earlier retirement. Even now a mortgage calculator estimates, what, I can take a mortage and I can afford it easily.