Investment

We all know that the asset is a very valuable and humans are the most valuable asset because it is a grace from God the Creator. If sorted, then there are various kinds of assets in the face of this earth, but that is discussed here is limited to assets related to its main financial planning financial assets only.

Speaking about the addition of assets, it would be wise if we perform an evaluation of wealth (assets) net we have. Assets or net worth is the difference of the total wealth or property that you have reduced by all existing debt.

Mathematically can be written as follows:
H (Treasure) - U (Debt) = KB (Net Worth)

Then what is meant by wealth, aka treasure?, Is anything material you have and have a sale value (economically), for example:

   1. Balance at Bank (savings, time deposits and demand deposits);
   2. The market value of investment assets (bonds, mutual funds & stocks);
   3. The market value of pure gold jewelry (precious metal);
   4. Cash value life insurance;
   5. The market value of your property (the calculation is realized price for sales of property class and the nearest object sales tax + value divided by 2);
   6. The market value of vehicles (cars, motorcycles);
   7. The market value of household appliances (kitchen appliances, electronics, etc.);
   8. The market value of home furnishings (furniture), the value of personal items, etc..

Then what is meant by debt?, Is the entire remainder of the loan (principal and interest) that you have (remember borrowing rather than equity investment from another party to you), for example:

   1. Short-term debt (up to 1 year);
   2. Medium-term over 1 year to 5 years;
   3. Long-term debt over 5 years.

The next question is how can I improve these assets?, Do invest, here are the steps:

1. Invest with a total of at least 10% of your income;
2. Set goals (targets) such investment, for example to fund children's education when entering university or for the preparation of buying a new home or perhaps for a vacation with your family?, Etc..;
3. Determine the time available, based on point 2 obtained the time available, eg for education funds available 10 years (for parents who have children by age 8 years), funds to buy a house is planned 5 years from now and to fund needed vacation time (eg ) 9 months from now;
4. Determine your investment instruments based on the time available, form your personal investment portfolio, eg as follows:
a.Waktu available is less than 1 year, Money Market Fund (RDPU) with a combination of deposits;
b.Waktu available between 1-3 years, Fixed Income Fund (RDPT) combined with the Balanced Fund (RDC);
c.Waktu available between 3-5 years, Balanced Fund (RDC) with a combination of Mutual Shares Fund (RDS) and if possible (depending of your cash assets) can be added with a little combination on the purchase and sale of shares (trading) on ​​the stock exchange ;
d.Diatas 5 years, Mutual Shares Fund (RDS) in large part, by a combination of investment in the trading of stocks (small portion);
e.Catatan addition to points 'c' and 'd' is recommended only for those who already have cash assets are illiquid in the form of emergency funding that has reached 6 to 12 times the average expenditure per month;

5. Do the protection of your financial assets by purchasing life insurance through traditional products with type YRT (Yearly Renewable Term), ie products that only give the sum insured without any investment or savings element. Why this type?, Because it has a large sum assured with a minimal premium, while insurance combined with investment (unit-linked) has been shown in the first 5 years the cost is very expensive.

6.Lakukan monitoring of point 4 above, see the development of investment funds versus a minimum target to be achieved.

After a step to improve the asset through investments made, then the next step is to re-evaluate periodically against your net worth, here is the formulation Ideal Net Worth Ratio (at least, mathematically:
Us (Age) X Page (Annual Revenue) / 10> = 3.5 PT (Pedapatan Annual)
So after you make an investment please evaluation (annual basis), whether:

    * KB (Net Worth) you've been> = 3.5 PT or
    * KB (Net Worth) you have to be <3.5 PT

For details see the sample table below, two workers with different positions:
Description

Director

Employees
Age (years)

35

35
Revenues / Month (Average)

Rp 35,000,000

Rp 2.500.000
Income / Year

USD 420 million

IDR 30,000,000
Net Worth

USD 850 million

Rp 125,000,000

Description / Analysis:
Total net assets of the director of USD 850 million, a net worth of the employee only Rp 125 million, but in fact the employee is richer than the director, is due to:
Net Worth Ratio

Director

Employees
Ideal Ratio of Net Worth

2,02

4,17
Ideal Ratio of Net Worth (minimum)

3,50

3,50

So it turns out the director was not richer than the employee because the ratio is only 2.02 Net Worth Director (may have a huge debt coupled with a luxurious lifestyle), while the employee has a Net Worth ratio is better than the minimum standard that is equal to 4, 17. Do not blame yourself if the ratio is not reached, this is the first step to doing financial planning, try a minimum ratio of 3.50 can be achieved in line with the development time.

If you want to be financially rich is the first message is "Do You Get Rich Investing then", do not think backwards "to invest When It Rich!". This simple message, please try as far as we know the world's richest people doing the first message, good luck.