Read on Twitter
10 finance terms you need to know if you want to build wealth:
"Lifestyle creep"
This is when you spend more money as you earn more money.
Luxuries like cars, fancy houses, and material items keep many “rich” people broke.
If you make $200K a year but spend $190K, it’ll be difficult to create true wealth.
This is when you spend more money as you earn more money.
Luxuries like cars, fancy houses, and material items keep many “rich” people broke.
If you make $200K a year but spend $190K, it’ll be difficult to create true wealth.
"Liquidity"
How quickly and easily you can pull cash out of a certain asset.
Liquidity is important because it allows you to overcome financial challenges and/or secure loans when the need arises.
How quickly and easily you can pull cash out of a certain asset.
Liquidity is important because it allows you to overcome financial challenges and/or secure loans when the need arises.
"Bankable"
Being bankable means that you or your business can get financing from a bank.
ie. $50,000 loan to buy real estate or invest in scaling your business.
Being bankable means that you or your business can get financing from a bank.
ie. $50,000 loan to buy real estate or invest in scaling your business.
"Dollar-cost averaging"
An investment strategy where the investor puts the same dollar amount of money into the market at consistent intervals, regardless of the price.
An investment strategy where the investor puts the same dollar amount of money into the market at consistent intervals, regardless of the price.
"Credit score"
This is a 3 digit number, typically between 300 and 850.
You’re rated based on your debt history.
A high credit score shows your trustworthiness to lenders, meaning you're likely to repay your debts.
This is crucial to becoming bankable and getting loans.
This is a 3 digit number, typically between 300 and 850.
You’re rated based on your debt history.
A high credit score shows your trustworthiness to lenders, meaning you're likely to repay your debts.
This is crucial to becoming bankable and getting loans.
"Inflation"
The % by which the cost of goods + services increase and the value of money decreases over time.
Inflation affects the entire economy and the returns on your investments.
Let’s say you gained 6% on a stock.
But inflation is 8%.
This means you’re actually down 2%.
The % by which the cost of goods + services increase and the value of money decreases over time.
Inflation affects the entire economy and the returns on your investments.
Let’s say you gained 6% on a stock.
But inflation is 8%.
This means you’re actually down 2%.
"Net worth"
This is the total value of your assets — income, investments, real estate — minus your total amount of debt.
This number should increase year after year.
This is the total value of your assets — income, investments, real estate — minus your total amount of debt.
This number should increase year after year.
"Revenue"
This is the total amount of money generated before expenses are deducted.
It’s important to not mistake revenue with net income because it can give you a false sense of well-being of your business.
This is the total amount of money generated before expenses are deducted.
It’s important to not mistake revenue with net income because it can give you a false sense of well-being of your business.
"Net income"
This is the total amount of money left over, after all:
- Taxes
- Interest
- Expenses
Have been deducted from the revenue.
This is the total amount of money left over, after all:
- Taxes
- Interest
- Expenses
Have been deducted from the revenue.
"Collateral"
A borrower’s item, property, or asset that a lender accepts as a guarantee of a loan.
If the borrower cannot pay back the loan, collateral can become the property of the lender.
A borrower’s item, property, or asset that a lender accepts as a guarantee of a loan.
If the borrower cannot pay back the loan, collateral can become the property of the lender.
10 finance terms you need to know if you’re serious about building wealth:
1. Lifestyle creep
2. Liquidity
3. Bankable
4. Dollar-cost averaging
5. Credit score
6. Inflation
7. Net worth
8. Revenue
9. Net income
10. Collateral
1. Lifestyle creep
2. Liquidity
3. Bankable
4. Dollar-cost averaging
5. Credit score
6. Inflation
7. Net worth
8. Revenue
9. Net income
10. Collateral
Got value from this thread?
Retweet the first tweet to help others improve their lives.
Want more content like this?
Follow me @itsandrewviera
Thanks for reading. https://twitter.com/itsandrewviera/status/1534519360609366016
Retweet the first tweet to help others improve their lives.
Want more content like this?
Follow me @itsandrewviera
Thanks for reading. https://twitter.com/itsandrewviera/status/1534519360609366016
