Class 1 - Net gain or(loss INCOME has nothing to do with...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Banker Secrets…. How do you avoid being rejected for a personal loan? - Keep your debt payments under 15% of your disposable income Financial Statements Income and Expense statements - Income: wages, child support Retirement – pension, ss, personal funds Assistance – unemployment, workman’s comp, disability, WIC, veteran’s benefits, SS (non pension) Expenses: Fixed - Usually paid in the same amount each time period, often contractual (difficult to reduce & need to be paid even if you lose your job) - scheduled payments Loan payments Insurance premiums Rent Variable – controllable expenses that usually occur in the short run (individual has control) Food Clothes Entertainment Household supplies Disposable (NET) income or Discretionary Income? Gross income - TAX _______________ Net income Disposable Income (at my disposal pay my bills) Discretionary Income (to save, spend or invest)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Net gain or (loss) INCOME has nothing to do with WEALTH. Net Worth Statement Asset Monetary (liquid) Tangible (physical) Investment (Capital) Liabilities Short term Long term NET worth positive or (negative) Assets Monetary/Liquid-Easily/readily converted to cash with no loss in market value or penalty-Maintenance of living expenses Cash Checks Tangible Assets/Lifestyle-Contributes to a particular quality of life-Maintenance of one’s lifestyle-Generally depreciates over time Houses Appliances Furniture Auto Tools Jewels Investment Assets/Capital Assets- Provides additional income- May increase over time- Generally appreciates Fair Market Value What any given buyer will give any given seller on any given day . Short term liability: less than one year to pay off Long term liability: more than one year to pay off...
View Full Document

This note was uploaded on 12/01/2011 for the course HDFS 238 taught by Professor Boyce during the Fall '10 term at Michigan State University.

Page1 / 2

Class 1 - Net gain or(loss INCOME has nothing to do with...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online