Comments on: Money Lesson #1: Basic Finance, Cash Flow, and Risk Management http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/ Personal Finance. Investing. Wealth Building. Thu, 18 Mar 2010 04:17:34 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Make Friends, Earn Money http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/comment-page-1/#comment-10980 Make Friends, Earn Money Fri, 30 May 2008 10:00:08 +0000 http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/#comment-10980 In business it is often not lack of income that kills a business but the lack of cash flow. You can have all the income in the world but if people aren't paying up and you don't have the money in the bank then it doesn't matter. I believe that the same is true of personal finances and it is often what leads us to have to use credit cards etc because of poor planning. In business it is often not lack of income that kills a business but the lack of cash flow. You can have all the income in the world but if people aren’t paying up and you don’t have the money in the bank then it doesn’t matter. I believe that the same is true of personal finances and it is often what leads us to have to use credit cards etc because of poor planning.

]]> By: Personal finance money tips - October 6, 2007 http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/comment-page-1/#comment-916 Personal finance money tips - October 6, 2007 Fri, 05 Oct 2007 22:03:40 +0000 http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/#comment-916 [...] Bhulipongsanon presents Basic Finance Lessons posted at Moolanomy. This post discussed the risk of having only one financial savvy person in the [...] [...] Bhulipongsanon presents Basic Finance Lessons posted at Moolanomy. This post discussed the risk of having only one financial savvy person in the [...]

]]> By: Pinyo http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/comment-page-1/#comment-706 Pinyo Sun, 23 Sep 2007 16:41:26 +0000 http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/#comment-706 Chris -- almost. There are two type of expenses. Expenses for NEEDS -- these are necessary and you can't avoid them -- e.g., food, shelter, etc. And, expenses for WANTS -- you can avoid these -- e.g., Starbucks coffee, iPhone, HDTV, trip to Paris, etc. Chris — almost. There are two type of expenses. Expenses for NEEDS — these are necessary and you can’t avoid them — e.g., food, shelter, etc. And, expenses for WANTS — you can avoid these — e.g., Starbucks coffee, iPhone, HDTV, trip to Paris, etc.

]]> By: Chris http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/comment-page-1/#comment-703 Chris Sun, 23 Sep 2007 13:43:40 +0000 http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/#comment-703 Yes, Pinyo, that helped a lot. The word "debt" cleared it all up for me. To recap, debt is something we actively have chosen to incur whereas expenses are inescapable, whether we choose to have them or not, i.e, taxes, food, medical care. It is a fine line, sometimes, because we might deem it an expense (or necessity) to find a way to work and so we incur a debt (or liability) by financing a vehicle in order to fulfil the "need" of getting to work. Thanks, Pinyo. Looking forward to lesson #2. (I hope your wife is, too!) Yes, Pinyo, that helped a lot. The word “debt” cleared it all up for me. To recap, debt is something we actively have chosen to incur whereas expenses are inescapable, whether we choose to have them or not, i.e, taxes, food, medical care. It is a fine line, sometimes, because we might deem it an expense (or necessity) to find a way to work and so we incur a debt (or liability) by financing a vehicle in order to fulfil the “need” of getting to work.

Thanks, Pinyo. Looking forward to lesson #2. (I hope your wife is, too!)

]]> By: Pinyo http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/comment-page-1/#comment-698 Pinyo Sun, 23 Sep 2007 01:19:14 +0000 http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/#comment-698 Chris - it's a good question. It's hard to differentiate because they are related. First, you can live WITHOUT liabilities (debt is a better word, but I didn't want to call my diagram READ). For example, you don't need car loan to buy a car, student loan to go to school, credit card debt to use the card, nor mortgage to buy a house (hard, but can be done). Second, expenses are money that you need to spend to survive -- e.g., food, shelter, clothing, medicine, etc. -- or because you have to -- i.e., taxes. So what I tried to explain was, if your expenses are very high and you can't afford it with your income, you will have to take out loans to cover your expenses (or sell what you already have to pay for those expenses). Did that help? Chris – it’s a good question. It’s hard to differentiate because they are related. First, you can live WITHOUT liabilities (debt is a better word, but I didn’t want to call my diagram READ). For example, you don’t need car loan to buy a car, student loan to go to school, credit card debt to use the card, nor mortgage to buy a house (hard, but can be done).

Second, expenses are money that you need to spend to survive — e.g., food, shelter, clothing, medicine, etc. — or because you have to — i.e., taxes.

So what I tried to explain was, if your expenses are very high and you can’t afford it with your income, you will have to take out loans to cover your expenses (or sell what you already have to pay for those expenses).

Did that help?

]]> By: Chris http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/comment-page-1/#comment-695 Chris Sat, 22 Sep 2007 21:52:48 +0000 http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/#comment-695 Hey Pinyo, could you help clarify something for me regarding your REAL simple categories? I'm having trouble seeing what the dividing line is between an expense and a liability. When you said this above " If we do not manage our money well — i.e., our expenses exceed our revenue— we will have more debt, or have to sell some assets to cover the expenses...", would the category "liabilities" also be part of this equation? Liabilities must also decrease your net worth, along with expenses; however, I think I'm having trouble differentiating between what is an expense and what is a liability. Is a liability something that is not a basic necessity to live, such as credit cards, auto loans, etc., yet an expense is a roof over your head, food in your stomach, and lights to see at night with? Or are expenses and liabilities all basically the same thing when it comes to whittling away your personal worth? Hope I don't sound like too much of an idiot, I just want to be sure that I'm following along with you and understanding every iota! Thank you, Pinyo. Hey Pinyo, could you help clarify something for me regarding your REAL simple categories? I’m having trouble seeing what the dividing line is between an expense and a liability. When you said this above ” If we do not manage our money well — i.e., our expenses exceed our revenue— we will have more debt, or have to sell some assets to cover the expenses…”, would the category “liabilities” also be part of this equation?

Liabilities must also decrease your net worth, along with expenses; however, I think I’m having trouble differentiating between what is an expense and what is a liability. Is a liability something that is not a basic necessity to live, such as credit cards, auto loans, etc., yet an expense is a roof over your head, food in your stomach, and lights to see at night with? Or are expenses and liabilities all basically the same thing when it comes to whittling away your personal worth?

Hope I don’t sound like too much of an idiot, I just want to be sure that I’m following along with you and understanding every iota!

Thank you, Pinyo.

]]> By: Pinyo http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/comment-page-1/#comment-692 Pinyo Sat, 22 Sep 2007 17:56:20 +0000 http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/#comment-692 @Chris - thank you for sharing your story, I think yours is very typical of Americans' lives. Medical insurance is definitely a big problem in this country. At this rate, it will soon surpass housing expense as #1 expense for typical American. That's very scary. Also, overspending is a very easy thing to do. With all the advertising and marketing to lure us to spend, and the convenience of credit card. Congratulation on your new job. It is definitely a new chapter and a chance to start fresh. I welcome you along on my journey! @KCLau - Although I do not think very highly of Robert Kiyosaki and Rich Dad Poor Dad, I have to admit there are some part of his book that was insightful -- as noted in my review about his book. Overall, I think you did a great job with your post at simplifying and demonstrating the cash flow concept. It was very easy to understand. @Chris – thank you for sharing your story, I think yours is very typical of Americans’ lives. Medical insurance is definitely a big problem in this country. At this rate, it will soon surpass housing expense as #1 expense for typical American. That’s very scary.

Also, overspending is a very easy thing to do. With all the advertising and marketing to lure us to spend, and the convenience of credit card.

Congratulation on your new job. It is definitely a new chapter and a chance to start fresh. I welcome you along on my journey!

@KCLau – Although I do not think very highly of Robert Kiyosaki and Rich Dad Poor Dad, I have to admit there are some part of his book that was insightful — as noted in my review about his book.

Overall, I think you did a great job with your post at simplifying and demonstrating the cash flow concept. It was very easy to understand.

]]> By: The Daily Dough (We Reached 1,000 Visitors Per Day edition!) » The Dough Roller http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/comment-page-1/#comment-687 The Daily Dough (We Reached 1,000 Visitors Per Day edition!) » The Dough Roller Sat, 22 Sep 2007 11:11:45 +0000 http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/#comment-687 [...] Moolanomy has a nice article on basic finance, cash flow and risk management. [...] [...] Moolanomy has a nice article on basic finance, cash flow and risk management. [...]

]]> By: KCLau http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/comment-page-1/#comment-686 KCLau Sat, 22 Sep 2007 07:14:16 +0000 http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/#comment-686 Hi, I think you are doing very well. Maybe you can add in some chart illustration to show her how money flow. Such as using the cash flow chart and net worth diagram. I've written a post about hacking the charts. http://kclau.com/2007/08/29/hacking-your-cash-flow-net-worth-chart/ Hi, I think you are doing very well. Maybe you can add in some chart illustration to show her how money flow. Such as using the cash flow chart and net worth diagram.

I’ve written a post about hacking the charts.
http://kclau.com/2007/08/29/ha.....rth-chart/

]]> By: FinancialDominance.com » Weekly Highlights and Carnivals - Sick Kid Edition http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/comment-page-1/#comment-685 FinancialDominance.com » Weekly Highlights and Carnivals - Sick Kid Edition Sat, 22 Sep 2007 04:16:52 +0000 http://www.moolanomy.com/54/money-lesson-1-finance-basics-cash-flow-and-risk-management/#comment-685 [...] Moolanomy begins a series on finance basics. [...] [...] Moolanomy begins a series on finance basics. [...]

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