3 Things You Need To Know About Money (If You Want to be Rich)

There are some basic things that you will need to know about money if you want to get ahead financially and become rich. In this video, we'll go over Net Worth (which is assets minus liabilities), Cash Flow (income minus expenses), and Compound Interest and how you can use that in your favour. The first thing you need to know if you want to become rich is what is considered an asset and a liability to determine your net worth. In very basic terms, assets are something you own of value that can be converted to cash (or is already cash). Liabilities are something that costs you money, either through a debt/loan or something that just costs you ongoing maintenance over time. And your net worth is simply your assets minus your liabilities. Cash flow is income minus expenses. Positive cash flow, in my opinion, is even more important than assets because you need cash flow to build those assets. The next thing you need to understand if you want to become wealthy is how interest works. Interest works both ways, on both money you have and money you owe. Generally, you want to have a high-interest rate on money that you own (savings, investments), and a low-interest rate on money that you borrow (loans). Now the great thing about interest when it comes to savings and investing is the magic of compound interest. ----------------------------------- INSTAGRAM: https://www.instagram.com/traceyedwards.insta/ ------------------------------------------------------ MY SECOND CHANNEL (Lifestyle) https://www.youtube.com/c/TheTraceyEdition -------------------------------------------------------------------------- DISCLAIMER: Any information in my videos is my own personal opinion and not intended to be substituted for your own financial situation. Everyone has different circumstances and you need to consider what works for you and get professional advice when needed. Cool :)

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