In the previous article, we’ve seen how most people have problems saving money and learned about monthly cash flow, assets, liabilities, and value. We also learned how to build and enhance personal assets (value) in a more advanced way. 

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Here are 5 additional methods to improve your personal finances.

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6. Based on your total debt composition, are they considered bad debt or good debt?

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The definition of good debt is getting the loan to increase income. Bad debt is defined as a loan that can't increase income but needs to be repaid every month.

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Tip: You can plan to invest $90 per month in a relatively stable investment tool!

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7. Are all your current investments good investments? Or is it a loss-making investment?

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A good investment is one that provides stable income over the long term and is not affected by market fluctuations (e.g., rent and interest).

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A bad investment is one that is not very stable in the short and long term, with high risk and the possibility of loss of principal (e.g. speculative equity financing or spot hedging)

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Tip: You can take classes and learn to filter out quality investment tools!

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8. Upon reviewing your personal balance table, what problems have you identified?

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What problems have you found? Should you go and find out immediately and think of ways to improve it? Take note of what you can continue doing and where you still have an opportunity to improve.

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Tip: Alan Chan's income is not low, but it is not diversified enough. His monthly expenses are too high, his positive cash flow is small, and his loan interest rate is too high. 

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9. How do you solve these problems?

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Build a new, diversified income and reduce your monthly expenses by 30%. Increase positive cash flow and renegotiate the loan rate.

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10. How can you optimize your assets? What’s your best solution?

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Learn to change your investment tools and improve your network to get more quality business and investment opportunities.

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According to the United Nations, more than 75% of people in Asia are "financially illiterate," and in the United States, 4 out of 10 cardholders don't know how much the card interest rate is, or even the horrible revolving interest rate. Most people are still listening to the news to decide whether to invest; these people don't do their homework or research enough before investing.

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This will lead to investment losses; they don't know why they lose money.

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Before you start investing, please do your homework to understand your "asset and liability" situation.

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As Sun Tzu's Art of War says, "He who knows his enemy and knows himself will not be in danger in a hundred battles." 

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After receiving and practicing the above 10 points of improvement, Alan Chan, after one year, knocked out all the bad debts and left the good debts. He also increased the positive cash flow and investable funds and already had his own passive income system.

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Below is the Balance Sheet, and we wish you all the best in building your own asset enhancement plan step by step while using it.

Get access to a FREE masterclass now to take your investing to the next level!

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