Category: Depreciation

  • What is Depreciation and How Does it Affect Your Money?

    Depreciation and moneyDeprecation refers to the process by which an item you have purchased reduces in value. This is especially noticeable with big ticket items you may purchase with a loan – cars, electronics, computers. By the time you get these items home, they are already worth far less than you paid for them, simply because they are no longer new and no longer as valuable.

    If you are paying for an item with a personal loan or financing of some kind, depreciation can be a problem, since you end up owing more than the item is actually worth. If you have a problem with the loan, this can lead to some troubling difficulties. For example, let’s say that you buy a new car, get it financed by, and run into financial trouble. You decide to sell the car and pay off your loan. The trouble is, you may owe more for the car than you can sell the car for. You may sell off the car and still have to pay for part of the loan out of pocket. If your car is in an accident, your car insurance may also recompense you for less than the car is worth. This is something that you need to be aware of when getting a personal loan of financing on a new product.

    You don’t have to be brilliant to become wealthy. You don’t even have to be earning a lot of money. There are millions of people who have made millions of dollars on middle-income salaries (or even less). Here is what you need to do to enjoy the same success. There is one gentleman living in New York City who retired at age 30 with a net worth of a few million dollars. He started saving out of college and he only ever earned $20 000 a year, but he created wealth by saving half his income. Your plans may be more modest – save 15% of your income, for example – but you do need to save substantial amounts of money in order to become wealthy. People who succeed get excited about saving the way others get excited about shopping.

    People who think paycheck to paycheck are usually living paycheck to paycheck or are becoming dependant on payday loans. You need to consider the ways that today’s actions affect your finances in the long term. That $4 cup of latte may seem like nothing today and tomorrow but twenty years from now it could mean the difference between retirement and no savings. Don’t expect to get wealthy tomorrow but set up a plan to end up wealthy and follow your plan every day, even if that means starting small.
    There are two ways to become wealthy. One is to create your own business and sell it or make a profit from it. The other method is to make use of other people’s genius by buying their ideas or business. You can do this by investing in stocks, real estate, or other assets. Investing is a crucial part of the equation because with savings alone your money will grow too slowly to make you wealthy.…