Cashflow, Assets & Liabilities, How to be Rich

Cashflow

→ Movement of money into and out of your pocket.

→ Cash flows IN and OUT.

Cash Inflow

→When money flows INto your pocket.

e.g. allowance, monthly salary, customer payments, return on investments

Cash Outflow

→When money flows OUT of your pocket

e.g. expenses for grocery, electricity bills, house repairs, tuition fees

Net Cashflow

→Cash inflow - Cash outflow

e.g.

Cash Inflow = ₱10,000

Cash Outflow = ₱9,000

Net Cashflow = ₱1,000

Cash flow statement

→ A report that shows how you make money and how you spend money.

→ It shows you if you spend more money than you actually make.

→ It helps manage the business run smoothly.

Real Assets

→ Items that generate income — unless something is putting your money IN your pocket, (or wallet) it is not an Asset.

e.g. if you put your bicycle on rent and in return you get some money then your bike is an asset.

Real Liability

→ Something that takes money out of your pocket.

e.g. borrowing money, credit card balance, bills, house, cars

How to be Rich?

→ Make your real Assets greater than your real Liabilities.