Personal Finance - Few things I learned about Active /Passive Income & Asset Vs Liability

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1.Active Income Vs Passive Income

Majority of people work for Money .Imagine if we stop working today our active income will also stop .
Example , with your savings you are buying a house and giving it for rent , so now even you do not work you can generate passive income every month by the amount you get from rent !!

So we have to work toward passive income in life .

Do not work for money , money should work for you

2.Asset Vs liability

What every things generate money for you is a Asset .Fixed deposit , Investment in Real estate ,Money generated from business etc .

For anything if money goes out from your pocket is Liability .House rent , CAR maintenance , loan Interest etc

In life we need to increase the Asset and decrease the Liability .

Comments

Arulin.Selvam said…
You r right allwy!.. I realise now
7 June 2010 at 19:25
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