Income and expenses

• Personal income is an individual's total annual earnings

  from all sources such as wages, investments, dividends,

  rentals, profits and interest.
• The types of personal income is cash flow from work,

  capital and land.
• Personal expenses are all the costs you incur in your

  daily life.
• Your net worth is your financial value at any given point.

  A Statement of Net Worth is a statement of your financial

  worth at a specific time.
• To draw up a personal Statement of Net Worth, you list

  all of your assets and their values, and then all the money

  you owe to other people and businesses. You calculate

  your net worth using the following formula:

  net worth = total assets - total liabilities.
• If the net worth amount is positive, we call this a surplus.
• If the liabilities are more than the assets, we call this a

  deficit.
• Businesses receive income from sources such as sales

  of goods, sales of services, interest, rental, royalties and

  dividends.
• Business savings need to earn as much interest as possible

  and be accessible when they need the money.
• Cash flow is how money moves into and out of a

  business.
• An investment is when you buy a financial product such

  as a policy or investment plan, or a physical object such as

  a valuable painting, and get some kind of financial return

  on that object or product when you sell it or cash it in.
• A unit trust is a kind of investment in which an

  investment company or bank takes many people or

  businesses' small deposits and combines them to invest

  them as one large amount in a trust.