4 ms·
The basic form of financial literacy that is unbelievable to me that people still need to be told this: >Income should always exceed expenses; work to minimize
by MeinBlutIstBlau 5y ago
The basic form of financial literacy that is unbelievable to me that people still need to be told this:
>Income should always exceed expenses; work to minimize expenses and maximize income.
>You should always be saving money. A fool and their money are soon to part.
>Time = money. The purpose is to maximize both.
>Loans are assets and must be paid back plus interest.
The last step, learn double entry accounting and manage your budget tracking everything. If you don't even do that, you aren't even aware of what you blow your money on to know where to start.
- Jtsummers 5y agoLoans are not assets, they are liabilities.
- MeinBlutIstBlau 5y agoIn double entry accounting, when you receive a loan, you increase liabilities and assets. You don't just increase liabilities.
- deleted 5y ago[deleted]
- FabHK 5y agoWhen you take out a loan, you receive cash. That cash increases your assets, while the loan increases your liabilities (such that your equity does not change - until you have to pay interest.). (Though, notably, for a bank the client deposits are liabilities, and the loans to clients are assets, indeed.)
- MeinBlutIstBlau 5y agoOf which none of what you said contradicts what I said...
- FabHK 5y agoA loan is a liability, not an asset (for a non-bank).