UNDERSTANDING
INVESTING
WHAT ARE WE DOING
WHY WE ARE DOING IT
learning about personal finance
to become wealthy and financially free
Two Definitions
Assets
Liabilities
Something you buy that grows your wealth
Something you buy that shrinks your wealth
THE
ASSET OR LIABILITY
GAME
write the answers in the worksheet boxes
motorcycle
watch
house
car
stocks
Louis Vuitton
education
THE ANSWERS
motorcycle
Purchase Price : $16,000
Price after 5 years : $9,000
- $7,000
Liability
watch
Purchase Price : $50,000
Price after 5 years : $30,000
- $20,000
Liability
house
Purchase Price : $400,000
Price after 5 years : $550,000
+ $150,000
Asset
car
Purchase Price : $40,000
Price after 5 years : $25,000
- $15,000
Liability
stocks
Purchase Price : $40,000
Price after 5 years : $80,000
+ $40,000
Asset
Louis Vuitton
Purchase Price : $2,000
Price after 5 years : $400
- $1,600
Liability
education
Purchase Price : $30,000
Price after 5 years : $0
Price after 30 years : $1,000,000 +
+ $1,000,000
Asset
Assets
Liabilities
UNDERSTANDING INFLATION AND DEFLATION
Why did everything in the past used to be so cheap?
The US Dollar used to be more valuable.
The (USD) loses about 3% of its value each year.
2000 : $2.24
2025 : $5.29
Holding wealth in US Dollars for a long period of time will lose half its value in about 24 Years.
In this way, (USD) is a liability.
So, then where do you store your savings?
S&P500 index of the 500 largest US Companies (Stocks)
Owning stocks allows you to take value created by the workers of American companies and keep it for yourself.
The ownership class profits off of the working class, investing in stocks (ownership of companies) will allow you transition from working class to ownership class.