A guide to personal or national finances

Heading to Bankruptcy: Consumption greater than income, leading to debt-driven consumption.

Safe growth:  Less consumption than income, and invest the savings.

Risky growth:  Borrow to invest, betting that the investment return is greater than the cost of servicing the debt.

Safe haven:  Store savings in sound money.

Running your personal finance is in many ways similar to running a company or an economy.

For individuals:  You sell your time, skills, and energy to cover your needs and wants, hoping to have some savings at the end of day for emergency or investment.

For companies:  You sell a product or service to cover your costs of producing it, hoping to generate some profit to give back to shareholders or to invest for future growth.

For economies:  You produce to satisfy the needs and wants of your citizens, hoping to generate some surpluses to support innovative ventures.

One thought on “A guide to personal or national finances”

  1. A Soung Mind says:

    That makes a lot of sense and honestly sometimes the best answers are the most simple. Einstein said it best, “If you can’t explain it in a few words then you don’t know it well enough”. A lot of things now a days are so complicated but there is no reason for them to be. I think that is why the iPhone is so successful, because its user interface is simple to navigate and easy to learn, which if translated into other aspects of life can greatly improve them. I am sorry I went off on a tangent here but I think there is beauty in simplicity.

    Originally I was brought to your website because of the words with friends cheat and I am glad I stuck around to look around. I hope you are still around updating it, because I would love to see what you come up with next.

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