The economy of world, company, individuals , banks, organization and every monetary activities is based on stable and maintained flow of money. The flow consist of inflow and outflow basically, but it includes savings too, and we need to pay us firstly then we have to pay expenses, if possible we have to delay our expenses and we have to use time between the due date to rotate the money.
We have to learn to invest money and to use time value of money when our savings are in banks gaining about nothing. THE FLOW SHOULD BE LIKE THIS INCOME, PROPER ALLOCATION OF MONEY, PROPER INVESTMENT, CASH ON HAND, PAYMENT ONLY ON DUE DATE. We must have to be financially independent to live life livingly.
How does big company maintain their assets and liability, they mainly use time value of money and time between payment received and payment due date. They invest in short term security, tries to get benefit of stock exchange market, invest in commodity market and tries to get maximum return in that time period. The company only become profitable and efficient if maintain its financial resources and take benefit of market in short term. All big firms have their eagle eye on market to take benefits of short term market. As a normal person, we should have our eye on upcoming and going event to take benefits of its. Maintain eye on every political events and decision because it creates great opportunities to make money.
Every person should understand nation budget every year to forecast future events and to ahead of time to use time value of money and opportunities.
Example- If in budget govt. increase taxes on gold then we should invest in gold and companies related to gold to use time value of gold. Because value of gold will increase in upcoming time as taxes are increased, we can have benefits of differance of taxes value today to coming time.
If you examine big players of share market, they have created wealth by only maintaining proper cash flow and using time value with proper research and information. Sometimes you hear news of person loss a million today in market due to market crash but after few time only you hear news of him only gaining millions in day too. How they do it when market crash occur they invest more as early investors and new investors panic and take out their money quickly to avoid big loss and that time only big bulls buy stock at low price and earn opportunity income.
As a normal person we did not have more time to do proper research of market thus we always have to invest in mutual funds, sen senes index, and other investments plans after doing little research as we are investing our hard earn money.
AIM FOR BIG RESULT WITH BIG RISK BY INVESTING SMALL AMOUNT SO IF IT GET BIG YOU GET BIG AND LOSS THEN NOTHING MUCH ID LOST
Life= payment + liability < investment + asset
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