Know Where YOU Stand.
Buckminster Fuller determined that Wealth is the measure of how many days forward you would survive if you stopped working.
The method of calculating your Wealth is to calculate your monthly expenses. This is everything you pay out, mortgage, credit cards, running costs on vehicles, transportation costs, general living expenses, clothing, cleaning, rates, taxes, rent, etc.
Then you calculate your monthly income from your assets, not counting any salary or wages you might have. This is from rent, dividends, interest, share of business profits (assuming that you don't actually work in the business), royalties, etc.
Subtract your monthly expenses from your monthly income. If your income exceeds your expenses - you are Wealthy.
If your expenses exceed your income - you are Poor.
If you have monthly expenses of P20,000 and asset cash flow of P10,000 per month, you can last half the month. When your asset cash flow exceeds your monthly expenses you have achieved true Financial Independance. Keep your expenses below your asset cash flow and your Wealth will continue to grow.
Total Monthly Asset Income = P???????
Subtract -
Total Monthly Expenses = P???????
Total Surplus/Shortfall = P???????
Will you survive?
Notice that the Definition of Poor had nothing to do with How Much money you have, just do you have more than your expenses or not? Many people think that Rich and/or Poor are absolute numbers but that is not the case. If it were so, would P1,000,000 per year be Rich and P999,000 per year be Poor? Of course not. In some countries P50,000 per year is Rich while in others P500,000 per year is Poor. It is about having a Surplus. More than you need. That is achievable by everyone.
Buckminster Fuller also determined that most people were only 3 pay periods away from bankruptcy. In this age of retrenching, downsizing, closures and redundancies, it is important that you get your asset base growing.
An old Chinese Proverb states \"Dig your Well Before you Thirst.\" Good advice at any time.
