Leveraging House to create an asset for some

MONEYMONK WEEKLY MESSAGE 16/2019

Leveraging House in some cases when employer provides a house  or house

Rent allowance

Some people are in jobs where employer provides them with a house or pays house rent allowance. Such people have an unique opportunity to increase their assets and make a move faster towards their Financial Freedom by wisely selecting a location and buying a house.

Creating a house as an asset involves saving enough to pay as your share or margin money for a housing loan and then taking a loan and buying a house. This house can be rented out to generate additional  income. This income can be used initially to repay the housing loan and subsequently to invest to grow and contribute towards your Financial Freedom.

If you are in such jobs for a long haul and start using this method to increase your net worth early in some cases it is possible to have two such house properties before you retire.

Selection of location to buy such a house/ houses and some key considerations I will discuss in the next message.  

www.moneymonk.me

Note:

Earlier messages are posted on my blog https://moneymonk-joe.blogspot.com/

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If you or any of the people you know want to receive this weekly message they need to send a request mail to learnfrommoneymonk@gmail.com

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First House

MONEYMONK WEEKLY MESSAGE 15/2019

First House

The first house that you buy is not considered an asset (more about it later) when you are planning your personal finances.

After making a budget and writing down daily expenditures and reviewing these every month you will see some savings accumulating.

If these savings are enough to pay as margin money for your first house you need to consider buying your first house taking a mortgage/ housing loan.

If these savings are not adequate to pay the margin money you need to invest these savings for a while till they grow and become adequate. Savings at this stage  can be put in a recurring deposits or liquid funds . Many people make the mistake of investing at this stage  into mutual funds or equity based on hearsay from friends, vested interest advisers or media. The above are risky investments as its not the right time for you because you are not ready and equipped with the knowledge required. This is the right time to invest in your own learning about financial planning and equity investments but wait for investing in equity till the first house is purchased.

Depending on your personal life position and budget available the first house may be a stepping stone to the eventual house you may later buy. The tendency to over leverage by taking large mortgages must be avoided at all costs. This first house can be sold at the time of buying one suitable for your life long needs later. You need to consider various factors while buying your first house and they will defer with every individual.  Taking wise counsel at this stage will help.

www.moneymonk.me

Note:

Earlier messages are posted on my blog https://moneymonk-joe.blogspot.com/

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If you or any of the people you know want to receive this weekly message they need to send a request mail to learnfrommoneymonk@gmail.com

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Happiness

MONEYMONK WEEKLY MESSAGE 14/2019

Happiness

Fulfillment of needs leads to happiness. How are needs different from wants ?

Identify what are your needs first and understand how they are different from wants.

One way of defining happiness index I like is

No of desires( needs) fulfilled/ total no of desires *100

If you keep control over both numerator and denominator you will lead a happy life.

Does it mean being a minimalist and not being ambitious ? Minimalist if you can be it helps but you can still have ambitions and long term goals. Increase your short term desires/needs gradually so that your wants don’t become needs and reduce your present happiness.

Budgeting , Saving, covering risk with term and medical insurance and having an emergency fund will help increase your happiness and that of your family members too.

Another point ....Please decide to be happy every day and make an effort every day to make some one else happy too without any expectation.

Also keep in mind that your happiness does not depend on others but only on  your own self !

www.moneymonk.me

Note:

Earlier messages are posted on my blog https://moneymonk-joe.blogspot.com/

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Saving Rate and Savings Amount

MONEYMONK WEEKLY MESSAGE 13/2019

Savings rate and saving amount

Many people do not have adequate funds on retirement and are thus deprived of reaching their Financial Freedom due to a common mistake they make despite them increasing their savings gradually.

This mistake is in not realizing or knowing the difference between ‘the saving rate’ and ‘increasing the saving amount’ Let me explain with an example.

Person X

Starting Salary 50000  savings 10000  Savings rate 20%

Salary increase in a few years

New salary 100000 savings 15000 Savings rate 15%

Drop in savings rate is 5 % despite increasing savings but the drop in savings rate  percentage is 25 % (from 20% to 15%).

Why this affects adversely is because unknowingly one has increased ones expenditure or living standard. One is bound to find ones retiring funds inadequate and attaining Financial Freedom can be missed if this continues.

Please make sure that your ‘savings rate’ is maintained as you progress in life to ensure a comfortable retired life and eventually attaining Financial Freedom !!

www.moneymonk.me

Note:

Earlier messages are posted on my blog https://moneymonk-joe.blogspot.com/

________________________________________________________________

If you or any of the people you know want to receive this weekly message they need to send a request mail to learnfrommoneymonk@gmail.com

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