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The difference between assets and liabilities

ABOUT THIS ARTICLE

Knowing the difference between real assets and real liabilities and then setting your financial goals accordingly can be the difference between getting yourself financially sorted or the poorhouse. It underlines the value of financial literacy in helping achieve your goals.

The difference between assets and liabilities

Written by R. A. Stewart

An asset is something which pays you money while an asset is something that costs you money.

So let’s look at some examples.

Is property an asset or a liability?

Some people may say it is an asset because it is something you own, however, if you owe money on that property and are not getting a return on it then it is a liability because it is costing you money.

Is it an asset if you are receiving rent from that property?

Only if you are making a profit.

Some people would not agree saying, “The property is increasing in value over time.”

Lets not forget there are rates to pay plus maintenance costs and insurance to pay on that property so it could be costing you money in the long term but you will have to sit down and do your homework. 

Other investment times are less complicated such as the sharemarket so lets look at other investment types which are assets. 

Assets

Your retirement fund

Mutual Funds, also known as managed funds

Other investments

Business or farm

Learn to invest your money in items that can be quickly converted back to cash; some investments do not allow you to quickly turn the asset back into cash without jumping through several hoops.

Liabilities

Any item which has money owed on it and this is your form of transport, however there are circumstances where it may be an asset such as if the vehicle is used as a taxi, which therefore makes it an asset as it is producing an income. Such costs and the money owing on the vehicle can be tax deductible. The same applies to any vehicle used in a business.

Even though a vehicle used for work and business purposes may be classed as an asset, the money owed on that vehicle is a liability and will go into the accounts as such.

The reason why so many people are in such a poor financial state is that they borrow for stuff instead of saving for it and therefore pay more for that item in the form of interest payments.

A pet can be classed as a liability if it is costing you an arm and a leg to keep. Think of a dog for example; I read somewhere that it costs $20,000 to keep a dog during its lifetime. That is not just the food but vet bills and the like. A dog can be classed as a liability.

Do a stock take

Before you know where your money is going you need to do a stock take of all your spending. Your number one priority has to be the elimination of debt and plug up those leaks in your spending that is costing you money. In this way you will know where to make savings and redirect that money elsewhere.

Your task needs to be to reduce liabilities which means reducing debt then once you have savings use it to build your wealth. This involves setting goals which will increase your wealth and not send you to the poorhouse.

There are a number of share market platforms where you are able to drip feed money into the markets. Take advantage of these as they are a great way to build your financial literacy.

ABOUT THIS ARTICLE

Accumulating assets instead of liabilities will lead to a more prosperous future. It is vital for investors to know the difference between the two. In this article Robert Stewart explains this difference. Check out his blog at www.robertastewart.com

Start investing on a shoestring

Sharesies makes it possible for anyone to get into buying and selling shares. It is an online share market platform where you have the option of purchasing shares in individual companies or in various funds (managed/mutual funds). You can even start with $5. This is a no brainer because it gives investors young and not so young the chance to improve their financial literacy. There is certainly no substitute for experience when it comes to learning and this is applicable to everything else, not just investing.

Join sharesies here: https://sharesies.nz/r/377DFM

 

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Impersonating bank scam warning!

Impersonating bank scam warning!

A scam operating on the internet which involves impersonating well-known New Zealand financial adviser Frances Cook is contacting Ms Cook’s followers on social media. Those who comment on her content will receive a message from the scammer or scammers. Frances has 150,000 followers on twitter and the scammers will contact her followers with some offer. Frances will never message you with some offer or try to convince you to purchase cryptocurrency. With so many twitter profiles of Frances Cook it is hard to know who the real Frances Cook is.

It is the same old story of doing your due diligence.

Online banking scams the new norm

It is no secret that online banking scams are costing New Zealanders millions of dollars per annum and with technology such as artificial intelligence coming on the scene scammers have new ways of scamming people. It is important to put rules in place to prevent you from being a victim of a scam. Here is a list of rules to follow. You may have others that you could add to this list or may come up with others at a later date.

Don’t s

  1. Don’t use a common password such as your pet’s name or the name of your home town.
  2. Don’t sign in through a link in your email but instead type out the bank’s website address in the URL bar.
  3. Don’t save your password to your device.
  4. Don’t use the same email address your your banking as you do with a dating website.
  5. Don’t click on any banking links in your email
  6. Don’t link your debit card to your everyday account

 about

  1. Don’t have your wages go into your debit card
  2. Don’t just leave thousands of dollars in your ordinary savings account but put it in a separate account or bank that is not linked to the internet.
  3. Don’t click on any unfamiliar links in your email.
  4. Don’t use the same password for different accounts

Do’s

  1. Do be sceptical when you are offered an investment opportunity online.
  2. Do keep your financial affairs private apart from your own bank.
  3. Do ask for financial advice if you suspect something is not quite right.

4 Do change your passwords now and again.

  1. Do ensure you have 2 factor authentication in place for extra security
  2. Do invest your money in several places for extra protection.

About this article: The information in this article may not be applicable to your personal circumstances therefore discretion is advised.

www.robertastewart.com

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Dumb Debt can destroy your financial future!

The quickest way to a financial mess is to borrow for stuff that loses it’s value. You not only pay more for such items but the item is worth less than when you acquired it because it is no longer new once you take possession of it and therefore you will receive less than what you paid for it. This is called “Dumb Debt.”

Avoiding Dumb Debt at all costs

Written by R. A. Stewart

Everyone has seen the television commercials with slogans such as “Buy now pay later,” and the like.

you do not need to save your money to buy that new car, a wide screen TV, that latest smartphone, or a holiday in a tropical island when you can have all these things now. 

Instant gratification is a very expensive habit; one that will lead you to a life of financial challenges.

There have been misleading statements in some of the advertising; one I saw read, “Helping you to get ahead.”

That kind of slogan suggests that  the finance company is doing borrowers a favour which is far from the truth.

Loan sharks and finance companies thrive on financial ignorance; a person with even a basic grounding in personal finance will avoid loan sharks as if they had tested positive for covid.

One should ascertain whether the item is a want or a need before signing on the dotted line. 

Many people go into debt because they want to live a champagne lifestyle on a lemonade budget just to impress their friends. They are not happy with living modestly. 

An expensive lifestyle is costly in the long run. 

The parable of the prodigal son is a perfect example. Here was a young man who blew his inheritance on wasteful living and ended up living in poverty due to his lifestyle.

He not only blew his inheritance but was most likely living on credit.

It is borrowing that really kills off a person’s chances of financial success. That interest rate is dead money; it is the cost of borrowing.

Paying interest on stuff you have bought on credit adds to the cost of it and the value of a lot of stuff bought on credit is worth less as soon as you take possession of it.

“If you don’t have the money you don’t buy it,” is a simple philosophy to adopt.

What you think you cannot live without is something others have learned to live without. 

It all comes down to the choices we make.

There are some circumstances when it may be wise to borrow such as when the value of the item you are purchasing is going to make it financially worth your while such as a student loan. This may or may not mean you will get a good paying job but you must be absolutely clear that it is what you want to do otherwise the course will be a total waste of money.

ABOUT THIS ARTICLE

Feel free to use this article as content for your website, blog, or ebook. Check out my other articles on www.robertastewart.com

Disclaimer: The information in this article may not be applicable to your personal circumstances therefore discretion is advised. I may receive a small commission if you make a purchase from any of the links you click on.

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The averaging system for shares

The averaging system for shares

Averaging is a term which has been used by share market followers over the years. This is when an investor buys several shares in the same company over a period of time and the average price which was paid per share may be higher or lower depending on which direction the share price is going.

Here is an example of one New Zealand company, Fletcher Building beginning with January 4, 2023. The first three days of the year were public holidays so January 4 was used as the starting date and every seven days after that.

Date Share Price

4/1 4.71

11/1 4.90

18/1 5.06

25/1 5.11

1/2 5.25

8/2 5.46

15/2 5.07

22/2 4.81

1/3 4.71

8/3 4.65

15/3 4.50

Now let us assume that you had purchased Fletcher Building shares on each of these dates, investing the same amount of money. You would simply add up the totals of these prices and divide the answer by 11. That is the average price you paid for the share. In this case the average price you would have paid for Fletcher Building shares would have been $4.93 if you had bought them every week. 

We all know that shares go up and down so drip feeding shares into the market in this way will ensure that you have bought shares at a lower price when they are down as well as when they are on an upward trend.

Online trading platforms such as Sharesies and Robinhood make this process easy. If you have more money to spend you may want to choose two or more companies per year to invest in using this system.

As with other investment strategies you need to ask the question  “Where does this fit in with my financial goals?”

About this article

You may use this article as content for your ebook or web page. The information may not be applicable to your personal circumstances so discretion is advised.

Start investing on a shoestring

Sharesies makes it possible for anyone to get into buying and selling shares. It is an online share market platform where you have the option of purchasing shares in individual companies or in various funds (managed/mutual funds). You can even start with $5. This is a no brainer because it gives investors young and not so young the chance to improve their financial literacy. There is certainly no substitute for experience when it comes to learning and this is applicable to everything else, not just investing.

Join sharesies here: https://sharesies.nz/r/377DFM

 

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The Art of Averaging 

INTRODUCTION

Investors must realize that investing in the markets has its ups and downs (literally) that it is important to keep it all into the right perspective if investments do not go your way. There is a method of playing the markets in a way that you can take advantage of the market drops. 

The Art of Averaging 

Averaging is a term one may come across in the markets now and again; what this refers to is the average price paid for a particular share if you had bought shares in that particular company.

To calculate the average price paid for a particular share you add up the total amount you have paid for the shares and divide that by the number of shares you have bought in that company. 

The answer is the average amount that you have paid per share.

Try this mathematical question:

There are five numbers 10, 20, 30, 40, 50

What is the average number?

The calculation: 

Add up the five numbers:  10 + 20 + 30 + 40 + 50 = 150

Divide the total of the five numbers (150) by 5

150 divided by 5 = 30 (answer)

You can do this easily with a calculator.

There are so many share trading platforms available these days that investing directly into the sharemarket has never been easier for the ordinary man and women.

So how does averaging work?

If you purchase stock at regular intervals you will pay different prices for each stock because share prices go up and down. Imagine if you bought something at the supermarket last week at the full price then bought the same item this week on special. The average price you paid for the item will be somewhere between the higher price and the lower price.

The sharemarket works like that. By purchasing a particular stock at regular intervals you will manage to pick up some shares in it when the price is lower. This is the advantage of saving regularly. 

In fact I think there is a case for purchasing more shares when the price is low. The average price paid per share is determined by calculations as explained earlier. 

The averaging strategy can also be used in cryptocurrency investing. 

Bitcoin is more volatile than the sharemarket so an astute investor who has an eye for a bargain can invest when the price has dropped.

There are so many share trading platforms available that playing the markets is accessible to everyone. I have joined two of them in New Zealand. Most countries have share trading platforms available. Signing up for them is easy; you require some form of identification. Just follow the directions and you are all set up.

TO SUMMARISE

Playing the markets requires a positive mindset and a cool head. If you have these you can profit from falling markets. Averaging is a method that takes advantage of falling markets. 

ABOUT THIS ARTICLE

Robert Stewart has a blog with other articles of a finance nature. Visit www.robertastewart.com Feel free to post this article on to your site, use it as part of your ebook, share it, print it, even sell it.

 

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Crypto risks

Ways to do your dough on crypto investing

The advice to investors in Bitcoin or other cryptocurrency is be aware of the risks and plan accordingly. A prudent investor is not going to invest their entire life savings into crypto, something a fool may do and this is not just because of the volatility of cryptocurrencies. There is more than one way of your money disappearing with crypto. 

Here they are:

1 Volatility

This is the most common way to lose your money. We all know about the volatility of cryptocurrencies. We also know that it is possible for the value of your Bitcoin to drop significantly. It is because of this that you should only use discretionary spending money for purchasing cryptocurrency. 

What is discretionary spending money?

This is money you have left over after paying for your living costs.

2 Password amnesia

Losing your password is another way you can lose your money in bitcoin. Crypto wallets tend to allow you to have a number of failed log in attempts before you are locked out of your wallet permanently. This happened to an Australian man who had 400k in his crypto wallet. He had tried everything he could to remember his password. After 8 failed log in attempts he was left with two. No news on whether he had used up his last two attempts.

3 Hacking

Hacking can be a problem for websites and its users. Your email address can be hacked and if that happens your crypto will be exposed. It will pay to have a two step authentication system. That is you log in as normal with your email address and password. You are then sent a text and asked to type in the code which you received by text message.

4 Fraud or other circumstances

2022 saw the collapse of crypto exchanges FTX. The man behind FTX was arrested on suspicion of fraud. Blockfi also ran into difficulties but it is not known what its circumstances were. 

Bitcoin is not a substitute for your retirement fund. It needs to be treated separately and only with money you can fully afford to lose.

There are over 100 crypto exchanges and it is likely that others will suffer the same fate as FTX and Blockfi for various reasons. 

Scam warning

Here is a warning which you should take note of. I know someone who deposited $3,000 into his  bank account and the following day the money just simply vanished from his account. He alerted his bank. They found that his personal bank account was linked to his debit card which he gave to an overseas website to purchase goods. However, this site was hacked which provided those responsible with easy access to his money. I told him that he should have deposited the money into an account which is not linked to internet banking.

There was a happy ending as the bank paid him $3,000 for his loss.

ABOUT THIS ARTICLE

This article is of the opinion of the writer and may not be applicable to your personal circumstances. Feel free to share this article. You may use it as content for your blog/site or ebook.

Have some spare cash to invest in Bitcoin?

Then check out the coinbase, a well-established crypto-exchange. Coinbase makes it easy to buy and sell bitcoin. Check it out here:

https://coinbase.com/join/gochwv

www.robertastewart.com

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Your goals and investment strategy

Here is an article I posted on the site three or four years ago. If you are not from New Zealand then Sharesies and kiwisaver may be foreign to you. Sharesies is a share trading platform similar to Robin Hood in the US. Your own country may have its own version of Robin Hood and Sharesies.

Kiwisaver is the New Zealand retirement scheme with its own unique incentives to encourage people to contribute. Your own country will have its own scheme with its incentives.

Your goals and investment strategy

The type of investment you place your savings in all depends on your goals and the time frame for achieving your goals. Investing in low interest accounts is not the best strategy for long term goals while investing in growth funds in the share market is not necessarily the best option for achieving your short term goals. Your investment platform has to be tailored to suit your goals. This table will give you a better idea of what I am going on about.

SHORT TERM GOALS

A short term goal is any goal which can be achieved within a year. This may be for a holiday to the West Coast (if you are from another district) or saving up for a car (if it is cheap enough).

MEDIUM TERM GOALS

A medium term goal takes between a year to 5 years to achieve and can be saving for a house deposit or an overseas trip.

LONG TERM GOALS

A long term goal may be saving for your retirement or paying off your home mortgage.

Lets look at some investment options.

SHORT TERM GOALS.

If you already have the money saved up but won’t be needing the money for 3-6 months then investing in fixed term accounts with one of the high street banks is a good option but if you are actually saving up the money then opening up a special account for this is one but not ther only option. I understand that one is able to drip feed money into bonus bonds and it is easily accessible. Investing in Sharesies may be another option worth taking a look at

MEDIUM TERM GOALS

Investing in Sharesies is a good option I believe because your savings has potential for growth while you are saving but another option is to use an everyday savings account to save and once you have saved a certain amount invest in a 90-day investment with a high street bank. 

It should be pointed out that if you are saving for your first house deposit then joining kiwisaver is a must because you are able to withdraw part of your kiwisaver for a first home deposit provided you have been in the kiwisaver scheme for at least three years.

LONG TERM GOALS

Investing in kiwisaver is your best option here irrespective of the date of your birthday because even if the  retirement age of 65 is just around the corner, you can scale back the type of funds you are in from growth/balanced to more conservative however people may have 20 years or more left after they retire so this may not necessarily suit some people. Once one reaches 65, those in kiwisaver are able to withdraw their retirement savings in one hit or whenever they need it. 

There are so many investment options available to you and you do not have to be rich to get involved but you do need to invest to get rich, one investment I am in favour of is Sharesies;

If you have read my previous posts about explaining Sharesies, you can sign up on the link below;

https://sharesies.nz/r/377DFM

ABOUT THIS ARTICLE

This article is of the opinion and experience of the writer and may not be applicable to your personal circumstances. Seek independent finance advice if you require it. Feel free to use this article as content for your ebook or website/blog.

 

www.robertastewart.com

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Investing facts of life you must accept

Investing facts of life you must accept

In every aspect of life there are some cold hard facts that you need to get your head around. Investing your savings is no different. Here are seven facts of life when it comes to investing. Understand these and you will be better equipped to make better choices.

  1. Whenever there is a chance for a capital gain there is also a chance for capital loss

Whether you like it or not, if an opportunity for a capital gain arises then there is also the chance for a capital loss. It is easy to invest when all is going well and the money you have invested has grown but most of your capital gain will come when you are investing while others are selling. It requires patience and self control to stay with your financial plan when the markets are heading south. Your financial plan has to take into account the possibility of a bear market therefore, invest according to your timeline.

  1. It is time not timing which is the key to growing your wealth

The key to prosperity is to start saving early. Once you get into the habit of saving and investing from an early age then things will become easier for you years down the track. Saving a portion of your income means living within your means but that does not mean that you have to be very stingy. It means not frittering away your spare cash on items which are not going to help you financially in the long term. If you are on the verge of retirement or already retired then you have less time to recover from financial setbacks therefore cannot be as aggressive with your investing as the young ones but that does not mean that growth funds are out of bound but rather just balance your strategy depending on how soon you are going to use the money.

  1. Your investments are your responsibility

You may be using a financial adviser to deal with your investments but they are still your responsibility because an adviser cannot think for you; it is up to you to set your own goals which match your personal situation. It is then up to you to tell your adviser where you wish to invest your money. Some investors like to have someone to blame and during a market downturn the first person to blame is their fund manager. In the case of retirement schemes such as the New Zealand Kiwi saver, investors have the choice as to whether to invest their money in growth, balanced or conservative funds. If balanced funds are chosen then there is the choice of what percentage of your savings will be invested in growth funds. Balanced funds are a mixture of growth and conservative funds.

  1. Value is determined by what others are prepared to pay for

Have you ever stopped to ask yourself the question, “What will this be worth in x years time?” The answer is quite simple!

What gives something value is what others are prepared to pay for that item whether it is a painting, someone’s stamp collection, shares in a particular company, cryptocurrency, property, gold, or whatever. 

None of us can know for certain what the market will do, therefore we take calculated risks based on our knowledge and expectation. 

As with anything in life there is no guarantee but if you do your homework and put a bit of thought into your strategy then you can have a nice nest egg to call upon when you need the money.

  1. Life is one big pyramid

One fact of life you need to accept is that life is like a pyramid. Using sport as an example; few ever make it to the elite level, comparatively few that is compared to the numbers taking part. It is the elites who make the most money, then as you go down to each level there are more and more participants. At the grass roots level you will find the highest number of participants, these are the sports men, women, and children who take part in sport for no other reason other than the enjoyment they derive from their chosen sport. 

If you have the ability to make money from your sport then it certainly will pay to have a backup plan by adding another string to your bow.

As for investing, well, there can only be one Warren Buffet, Robert Kiyosaki, or Anthony Robbins. It is important that you be the best at being you and not try to be a second rate version of someone else. Your personal financial choices must be what is applicable to your own circumstances.

 

  1. Life is all about percentages

Most people have played the lottery and most of us whether we have played it or not have heard about the absurd amounts of money which some lucky lottery winners have won; sometimes running in the millions. There is something which you must understand and it is this; For every person who won the lottery there are countless thousands who have lost their money trying the same thing. This is also true of many aspects of investing. You may have heard about someone who made a killing on the share market, on bitcoin, or some other investment but you seldom hear of those who lost everything while trying the same thing. My advice to those who are thinking about taking on high risk investments is to only do so with discretionary spending money and not with your retirement savings or money set aside for a house deposit or a car.

  1. Life is a numbers game

In life you cannot expect to win every single time. That is unrealistic. But making mistakes is just part of the learning process. The fact is that the more mistakes one makes the more likely one is going to win. Some people avoided risk after the 1987 sharemarket crash having got their fingers burned during Black Monday. 

If you do not take risks then nothing may happen to you but then you will also miss out on some of life’s experiences. When it comes to investing you need to take some kinds, albeit calculated ones in order to get ahead of inflation and the cost of living, otherwise the value of your money.

www.robertastewart.com

ABOUT THIS ARTICLE

This article is of the opinion of the writer and is not necessarily applicable to your personal circumstances. Feel free to share this article. Users may also use the article as content for your blog/website/ebook.

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Investing-Making a start

Here is an article I found on one of my old USB sticks. Thought I would repost it if you have not seen it yet.

Investing-Making a start

You do not have to be rich to invest but you need to invest to be rich.

The key to developing a financial plan is to make a start irrespective of your financial position. So many people just want to bury their head in the sand and carry on as they have been doing for years, living from one payday to the next. Their only hope of getting ahead financially is to win the lottery. You can only start from the present irrespective of your financial situation. A savings plan starts with just the first dollar which you save. If you have absolutely nothing from your pay day each week and save one dollar this week then you are financially better off this week. Saving money becomes a habit and it is a habit well worth developing because in the long run it will make things easier for you. Think of your money as a seed, you have to sow it before you can grow it. People tend to come up with all kinds of excuses for not saving for their future. There is always something which has more priority, a new television, a holiday, debts etc.

In short such people are professional procrastinators when it comes to saving money, it is always something they intend to do in the future but never get around to it. Saving money or spending money becomes a habit and they are habits which will result in consequences decades from today. It is all very well saying “You can’t take it all with you” (when you die) but leaving your family in financial trouble when you die is irresponsible and selfish. You will reap what you sow therefore in order to reap a financial harvest when you retire, you need to sow into your retirement fund. 

Developing the savings habit when you have been a spender all your life is going to mean developing new habits such as doing without rather than borrowing for items you do not need and buying from thrift shops. It will take will power on your part, many people just do not have will power and will spend whatever is in their bank account and when the power, phone, or rates bill arrives in the mail, they don’t have the money to cover it. 

Setting up a retirement fund is a great idea for building up a future nest egg for your retirement years. The money is left to accumulate where you have no access to it which removes the temptation to spend it.

Money gives you options

Even if you had just one thousand dollars saved up you have more options than the person who has no savings at all, the person who has ten thousand dollars saved up has more options than the person who has just a thousand dollars saved. Options in terms of where to invest the money, where to holiday, and whether they can afford to move to another town for a job.

Advantages of joining kiwisaver

If you are wondering what advantages there are in joining kiwisaver then here are the main ones.

1–There are the $520 per annum tax credits. In order to gain the full amount of tax credits you must contribute at least $1,040 per annum to your kiwisaver account.

2-The employer contributions, this is at least 3% of your gross wages.

Other advantages are;

3-Having your funds locked away until your retirement removes the temptation to spend your savings.

4-Income received from your kiwisaver account will not be assessed as income by WINZ if you lose your job and are going on a benefit.

5-Having your money locked away prevents family members or so called friends from taking advantage of you.

Employees have the choice of whether to contribute 2%, 4%, or 8% of their gross wages into kiwisaver.

What happens to your kiwisaver fund if you die before you reach 65?

Your money is allocated to your estate in accordance with your last will but the government’s contributions will return to the crown. It is important for you to make out a will otherwise any money belonging to your estate could be reduced by legal fees and leave your heirs financially worse off especially if there is not enough money in the kitty to pay for your funeral. It is all about being responsible about your finances. 

The question should be “How will I fund my later years if I am unable to work?”

Kiwisaver could be your answer. Making provisions for you in later years is the responsible thing to do and kiwisaver is an excellent tool for achieving your financial goals.

www.robertastewart.com

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Financial language

Financial language

Written by R. A. Stewart

It is important to familiarize yourself with financial jargon and their meanings. Do your research on the internet for further information on what these terms mean. This increases your financial literacy.

ASSET RICH-CASH POOR

This refers to people whose wealth are tied up with their property but have little cash in the bank.

BAD DEBT

Usually described as consumer debt or dumb debt, bad debt is when one purchases consumer goods on credit. It is bad debt because the item which has been purchased loses it’s value over time.

CAPITAL GAINS.

This is the increase in value of your asset. It is important to keep in mind that if there is a chancre for a capital gain there is also a chance for a capital loss.

CASH ASSET

A cash asset is money in the bank, stocks and shares, and any investment invested with a financial institution.

EQUITY

When someone refers to the equity in their property, they mean how much equity is left after deducting the money owing on the property from it’s value.

DEPRECIATION

Depreciation is the reduced value of any item purchased. A vehicle is a perfect example of something which reduces it’s value over time.

FINANCIAL PLAN

A plan for your money. To address money issues.

GOOD DEBT

Borrowing money for something which increases in value is considered to be “good debt,” however, it is needs to be stressed that if something can increase in value then it is just as likely to decrease in value; shares and cryptocurrency are typical examples.

INFLATION

The is based on the average increase of prices of consumer goods. If your investments are earning less than the inflation rate then you are losing money. 

LIABILITY

This is anything which you have bought on credit and pay interest on. It is said to be a liability. A vehicle is a typical example of a liability. A house could be a liability if it is costing you money but it could be said to be an asset especially if it’s value is increasing per annum.

NON-CASH ASSET

A property is an example of a non-cash asset. 

RISK PROFILE

This is your temperament to risk and is one factor in determining where to invest your money.

www.robertastewart.com

 

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