TERMINOLOGIES IN INVESTMENTS THAT I ALWAYS COME ACROSS

Managing money is easy as long as we can spend lesser than we earn. The problem starts when we start to borrrow; we borrow from banks to buy a house, a car which are the essential things we need to ease our live nowadays. Big problem arise when we just do not buy a reliable car that can bring us from point A to point B. We buy a luxury car that has brand which cost is 100% or more than the cost of the original car. You name it BMW, Merc, Porche. Don't get me wrong. You can buy it if you have the money, by all means, buy.

If we can afford a bungalow, by all means, buy. It will provide us with more space and privacy to us and our family. Do not buy it if deep in your heart, you buy it for the sake of being seen as a wealthier person than those around you.

Credit cards are another culprit in our lives. If we are not money savvy, having more than two cards will get you in a big pool of debt. Credit card should only be used as an advance payment in order for us not to bring too much cash at any point of time. It has to be repaid once the statement of Account comes before the last date of payment. Anything exceeding that will be charged penalties eg late payment penalties, interest on amount being loaned etc. Conventional banks counted the interest on principal plus interest payable which makes it higher amount to be paid by end of the next month. Use your credit cards wisely and do not buy anything you do not need.

Most wealthy people I know as good in managing their finances. They live simple lives, they are networking with good industrious people like them, sharing ideas and business opportunities, and most importantly they are very positive about everything.Sometimes they are even willing to share with us. The problem with us is that we are not willing to be teached and we are being negative about some things. Always pushing off new ideas and not willing to explore things. Opportunities do not come knocking twice, people say.

I was listening to Robert Kiyosaki some nights ago and he was asked whether he wants to share his secrets of wealthiness with other people. He said that he will not give to those who do not want advise/information/lessons. He will only give his secrets to those who want it, searching for it, looking for it. I agree with him totally. People will not appreciate it if we give things FREE.

The terminologies that we need to understand
1. profit and loss
2. balance sheet
3. net worth
4. cash flow
5. NAV
6. Rule 72
7. Dollar Cost Averaging
8. Buy low sell high
9. Buy high sell higher
10. Return of investment
11. Rate of Return
12. Annualised Rate of Return
13. Financial Freedom
14. paasive income
15. passive residual income
16. EPS
17. PE Ratio
18. DE Ratio
17. market price
18. Reserve price

We may not have to master all terminologies before we can start investing. Start small and equip yourself with knowledge along the way. You need to be shown a way?