Getting Started ASAP
Return On Investment (ROI)
ROI is a calculation of the monetary value of an investment versus its cost. The ROI formula is: (profit minus cost) / cost. If you made $10,000 from a $1,000 effort, your return on investment (ROI) would be 0.9, or 90%. This can be also usually obtained through an investment calculator.
Financial Statements
What is a Personal Financial Statement?
A personal financial statement is a document, or set of documents, that outlines an individual’s financial position at a given point in time. It is usually composed of two sections – a balance sheet section and an income flow section.
Financial Plans
A financial plan involves a thorough examination of your income and spending. It can improve your understanding of your financial circumstances at all times. It establishes important short- and long-term financial goals upon which you can base your investment planning.
Net Worth
Your net worth looks like this:
Net Worth = Assets (what you own) – Liabilities (what you owe)
Assets would include:
- Money
- Investments
- Real Estate
- Vehicles
- Anything else of value that you own
Liabilities would include:
- Student loan debt
- Mortgage
- Credit card debt
- Auto loans
- Any other money you owe