Happy Wednesday! I hope you are having a great week!
I wanted to share some of the right questions to ask yourself before accumulating any asset. How you accumulate assets affects your financial freedom!
1. Does this item appreciate or depreciate in terms of value? If it doesn't increase your net worth then it's probably not going to get you closer to financial freedom.
2. What is the cost of the item today verses the total cost I'll pay when the item is paid off. For example, if you plan to purchase a home at a cost of $100,000 for 30 years today but the total cost will be $300,000 when you have paid it off. You instantly should know there is a problem. Would you prefer all that interest to go to the lender or into your savings?
3. When will I pay this item off? A great rule is to add the number of years you plan to pay for the item to your current age. Do you really want to be paying on that item for so many years? When do you enjoy the item if you never own it? In the house example above, do you want to seriously pay on that home for 30 plus years just because the monthly payment is comfortable?
There is a better way to accumulate assets without over paying in time and money. However according to overwhelming debt statistics most people are not aware of how to do it. It starts with the right questions and ends with the right financial plan of action.
Thank you for reading and have a blessed weekend!
Ann Taylor wrap skirt (here)
Nine West sandals (here)
Coach bag (here)