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How did you make your first Kes million?
Gathige
#181 Posted : Monday, August 12, 2013 5:46:01 PM
Rank: Elder


Joined: 3/29/2011
Posts: 2,242
murchr wrote:
Impunity wrote:


How do I put my two cars in the same calculation? Will their inclusion increase my net worth?
smile


Your cars are not assets unless you operate a car hire or a taxi business


@murchr, ignore Kiyosaki warped philosophy. Any item can be an asset or liability depending on its utility to the consumer. e.g. If you had 500k in a bank account and you utilize the same amount to buy a car for your enjoyment then the value when it was at the bank and when translated to a car remains an asset.
"Things that matter most must never be at the mercy of things that matter least." Goethe
Lolest!
#182 Posted : Monday, August 12, 2013 6:02:00 PM
Rank: Elder


Joined: 3/18/2011
Posts: 12,069
Location: Kianjokoma
Exactly @Gathige. Kiyosaki managed to form a few theories and the readers took them for facts. From an accounting point of view, your car can only be an asset in calculating networth. You will normlly credit your bank account/loan a/c if financed and debit your vehicle asset every time you buy a car. The thing is, your personal car is a depreciating asset and also 'eats' your money through running expenses. But from an accounting angle, it cannot be aliability as you can't buy liabilities!
Laughing out loudly smile Applause d'oh! Sad Drool Liar Shame on you Pray
murchr
#183 Posted : Monday, August 12, 2013 6:11:00 PM
Rank: Elder


Joined: 2/26/2012
Posts: 15,980
Gathige wrote:
murchr wrote:
Impunity wrote:


How do I put my two cars in the same calculation? Will their inclusion increase my net worth?
smile


Your cars are not assets unless you operate a car hire or a taxi business


@murchr, ignore Kiyosaki warped philosophy. Any item can be an asset or liability depending on its utility to the consumer. e.g. If you had 500k in a bank account and you utilize the same amount to buy a car for your enjoyment then the value when it was at the bank and when translated to a car remains an asset.


Am not a Kiyosaki follower my argument is...that car once out of the show room depreciates immensely and keeps depreciating with time, you will never get more from it unless its working for you. Kiyosaki believes your hse is not an asset but my view is land appreciates in value and so does your home. A car to me is a liability because apart from requiring fuel to move, you have to pay up insurance and other licenses that keep drawing money from you.
"There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
.
poundfoolish
#184 Posted : Monday, August 12, 2013 6:32:42 PM
Rank: Elder


Joined: 12/2/2009
Posts: 2,458
Location: Nairobi
Liquidity is also key...
Money has a time aspect to it..
if you needed money and its all or mostly tied up in assets.. such that its access in time of need is not as swift ( finding buyers.. closing transacction).. Then bado iko chida... millionaire you should be able to handle a few million transactions with ease

my 2 pence


seppuku wrote:
Impunity wrote:
seppuku wrote:
seppuku wrote:
Wendz wrote:
seppuku wrote:
freiks wrote:
Have never had it in my pillow case nor in my bank, but i find myself owning property of more than 10m am i still a millionaire?


Of course you are. Unless you're in debt for an amount bigger than that - loosely speaking. It's a question of net-worth. The guy that was worth 10k this morning and took out a loan of 2m from his SACCO in the afternoon is still worth 10k. Yeye hapana millionaire. Na akionekana aambiwe awache kudanganya watu.


Thought he'd be worth -990K.... ama hii hesabu sio ya Carey Francis?


Hehehe! @Wendz, hiyo ni ya Waititu Form 1D. The fellow will add all of his 2m to his asset column and a similar (negative) amount to his liabilities column. Result? KES 0.00 increase in networth.


That being said I have since made my first one since I was last on this thread. smile

Method? Rather traditional. Kukaza mchipi na kuweka pesa kwa SACCO ni kama ninalipwa. Bought land a while ago and liquidated it recently (after 2 years) at thrice my buying price. Looking to turn that into a habit. smile


Do we talk about liquid cash or things that can be liquefied/liquidated?

Kama ni mambo ya liquefaction/liquidation then I am worth tens of millions!

kama ni mambo na hard cash then niko in hundredsthousandsnnaire!!
Sad Sad


Assets - Liabilities = Net Worth

I think this is what we are talking about. If you are still worth tens of millions by that definition, you are doing quite well my brother.

symbols
#185 Posted : Monday, August 12, 2013 6:34:57 PM
Rank: Elder


Joined: 3/19/2013
Posts: 2,552
You had me wondering.Laughing out loudly
Lolest!
#186 Posted : Monday, August 12, 2013 7:04:11 PM
Rank: Elder


Joined: 3/18/2011
Posts: 12,069
Location: Kianjokoma
@murchr, a car is an asset but a depreciating asset. Thus in doing your net worth math, you should only use its market value not purchase price. But it's an asset still, the expenses notwithstanding. The value it gives you by being able to travel from Runda to Ngong Rd without passing through town/avoiding stressing ma3 touts etc is an unquatifiable plus. BTW, land too has costs. Rent, rates and security for instance!
Laughing out loudly smile Applause d'oh! Sad Drool Liar Shame on you Pray
murchr
#187 Posted : Monday, August 12, 2013 7:10:39 PM
Rank: Elder


Joined: 2/26/2012
Posts: 15,980
Lolest! wrote:
@murchr, a car is an asset but a depreciating asset. Thus in doing your net worth math, you should only use its market value not purchase price. But it's an asset still, the expenses notwithstanding. The value it gives you by being able to travel from Runda to Ngong Rd without passing through town/avoiding stressing ma3 touts etc is an unquatifiable plus. BTW, land too has costs. Rent, rates and security for instance!


Let me ask. Supposing murchr takes a loan of Ksh 3M to buy a 3M car at an interest rate of 10%, gets to pay around 30k yearly insurance, pays a certain amount for maintenance say 10K gets to fuel around 30k yearly then the car loses 10% in year 1, another 20% in year 2...what would be the value of that car by year 5?

To me an asset is anything that i can sell at a greater price than its worth - may be economics made more sense to me than accounting
"There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
.
Gathige
#188 Posted : Monday, August 12, 2013 9:59:44 PM
Rank: Elder


Joined: 3/29/2011
Posts: 2,242
murchr wrote:
Lolest! wrote:
@murchr, a car is an asset but a depreciating asset. Thus in doing your net worth math, you should only use its market value not purchase price. But it's an asset still, the expenses notwithstanding. The value it gives you by being able to travel from Runda to Ngong Rd without passing through town/avoiding stressing ma3 touts etc is an unquatifiable plus. BTW, land too has costs. Rent, rates and security for instance!


Let me ask. Supposing murchr takes a loan of Ksh 3M to buy a 3M car at an interest rate of 10%, gets to pay around 30k yearly insurance, pays a certain amount for maintenance say 10K gets to fuel around 30k yearly then the car loses 10% in year 1, another 20% in year 2...what would be the value of that car by year 5?

To me an asset is anything that i can sell at a greater price than its worth - may be economics made more sense to me than accounting


@murchr, let's look at value or utility that is generated by an item and not the monetary price in determining whether an item is an asset or liability. New social indicators like Happiness Index help cure what economics and accounting cannot measure. Eg You cannot put monetary value to what a stay home mom does but it's easy to quantify what a house help would do.

In the case of a car, if the user generates value from it on terms of generating income, social feel-good and improve on image it's a asset to that individual.

"Things that matter most must never be at the mercy of things that matter least." Goethe
murchr
#189 Posted : Monday, August 12, 2013 10:13:11 PM
Rank: Elder


Joined: 2/26/2012
Posts: 15,980
Gathige wrote:
murchr wrote:
Lolest! wrote:
@murchr, a car is an asset but a depreciating asset. Thus in doing your net worth math, you should only use its market value not purchase price. But it's an asset still, the expenses notwithstanding. The value it gives you by being able to travel from Runda to Ngong Rd without passing through town/avoiding stressing ma3 touts etc is an unquatifiable plus. BTW, land too has costs. Rent, rates and security for instance!


Let me ask. Supposing murchr takes a loan of Ksh 3M to buy a 3M car at an interest rate of 10%, gets to pay around 30k yearly insurance, pays a certain amount for maintenance say 10K gets to fuel around 30k yearly then the car loses 10% in year 1, another 20% in year 2...what would be the value of that car by year 5?

To me an asset is anything that i can sell at a greater price than its worth - may be economics made more sense to me than accounting


@murchr, let's look at value or utility that is generated by an item and not the monetary price in determining whether an item is an asset or liability. New social indicators like Happiness Index help cure what economics and accounting cannot measure. Eg You cannot put monetary value to what a stay home mom does but it's easy to quantify what a house help would do.

In the case of a car, if the user generates value from it on terms of generating income, social feel-good and improve on image it's a asset to that individual.



Laughing out loudly Laughing out loudly Laughing out loudly Its really not worth calculating when one is trying to establish their net worth. The same way we dont calculate the value of our cloths or furniture.
"There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
.
mawinder
#190 Posted : Tuesday, August 13, 2013 6:27:12 AM
Rank: Elder


Joined: 4/30/2008
Posts: 6,029
What about the Rolls Royce that was bought in 1937 for 610 bob and at Concours a buyer was offering 8m,what about an Isuzu lorry that was bought in 1971 for 13,000 and is now going for 1.2m?
murchr
#191 Posted : Tuesday, August 13, 2013 7:21:55 AM
Rank: Elder


Joined: 2/26/2012
Posts: 15,980
mawinder wrote:
What about the Rolls Royce that was bought in 1937 for 610 bob and at Concours a buyer was offering 8m,what about an Isuzu lorry that was bought in 1971 for 13,000 and is now going for 1.2m?


Its an asset either way because its bringing in money, a liability draws out money
"There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
.
seppuku
#192 Posted : Tuesday, August 13, 2013 8:49:15 AM
Rank: Veteran


Joined: 5/11/2010
Posts: 918
murchr wrote:
Gathige wrote:
murchr wrote:
Lolest! wrote:
@murchr, a car is an asset but a depreciating asset. Thus in doing your net worth math, you should only use its market value not purchase price. But it's an asset still, the expenses notwithstanding. The value it gives you by being able to travel from Runda to Ngong Rd without passing through town/avoiding stressing ma3 touts etc is an unquatifiable plus. BTW, land too has costs. Rent, rates and security for instance!


Let me ask. Supposing murchr takes a loan of Ksh 3M to buy a 3M car at an interest rate of 10%, gets to pay around 30k yearly insurance, pays a certain amount for maintenance say 10K gets to fuel around 30k yearly then the car loses 10% in year 1, another 20% in year 2...what would be the value of that car by year 5?

To me an asset is anything that i can sell at a greater price than its worth - may be economics made more sense to me than accounting


@murchr, let's look at value or utility that is generated by an item and not the monetary price in determining whether an item is an asset or liability. New social indicators like Happiness Index help cure what economics and accounting cannot measure. Eg You cannot put monetary value to what a stay home mom does but it's easy to quantify what a house help would do.

In the case of a car, if the user generates value from it on terms of generating income, social feel-good and improve on image it's a asset to that individual.



Laughing out loudly Laughing out loudly Laughing out loudly Its really not worth calculating when one is trying to establish their net worth. The same way we dont calculate the value of our cloths or furniture.


Nope. Clothes are technically (depreciating) assets. The reason we don't include them in the balance sheet is that we expense them immediately when we buy them because they cost relatively too little to stagger. Bigger (depreciating) assets are expended over time through depreciation. If you are running a big hotel and you buy a huge amount of bedding, you'd probably put that in your asset column. If you buy two pillow cases with hares drawn on them because you think it will tickle your wife, you expense them immediately.

Disclaimer: I have never seen the inside of an accounting classroom. smile
Learn first to treat your time as you would your money, then treat your money as you do your time.
Museveni
#193 Posted : Tuesday, August 13, 2013 9:10:13 AM
Rank: Member


Joined: 8/16/2012
Posts: 660
Gathige wrote:
murchr wrote:
Lolest! wrote:
@murchr, a car is an asset but a depreciating asset. Thus in doing your net worth math, you should only use its market value not purchase price. But it's an asset still, the expenses notwithstanding. The value it gives you by being able to travel from Runda to Ngong Rd without passing through town/avoiding stressing ma3 touts etc is an unquatifiable plus. BTW, land too has costs. Rent, rates and security for instance!


Let me ask. Supposing murchr takes a loan of Ksh 3M to buy a 3M car at an interest rate of 10%, gets to pay around 30k yearly insurance, pays a certain amount for maintenance say 10K gets to fuel around 30k yearly then the car loses 10% in year 1, another 20% in year 2...what would be the value of that car by year 5?

To me an asset is anything that i can sell at a greater price than its worth - may be economics made more sense to me than accounting


@murchr, let's look at value or utility that is generated by an item and not the monetary price in determining whether an item is an asset or liability. New social indicators like Happiness Index help cure what economics and accounting cannot measure. Eg You cannot put monetary value to what a stay home mom does but it's easy to quantify what a house help would do.

In the case of a car, if the user generates value from it on terms of generating income, social feel-good and improve on image it's a asset to that individual.



It is good to point out that if that highlighted part is in the consideration, the opportunity cost is too high & one would better be advised on buying other assets. Otherwise, this thread will turn into "how I SPENT my first KeS million"
Live and learn; and don’t forget, nothing ventured, nothing gained.
Wakanyugi
#194 Posted : Tuesday, August 13, 2013 10:11:40 AM
Rank: Veteran


Joined: 7/3/2007
Posts: 1,634
Lolest! wrote:
The thing is, your personal car is a depreciating asset and also 'eats' your money through running expenses.


I think this is Kyosaki's point too, if I read him right.

Everything that has a 'value' can be considered an asset. But, when it comes to building wealth, some assets take away more than they give back.


"The opposite of a correct statement is a false statement. But the opposite of a profound truth may well be another profound truth." (Niels Bohr)
mpobiz
#195 Posted : Tuesday, August 13, 2013 11:13:34 AM
Rank: Elder


Joined: 8/10/2010
Posts: 2,264
I have asked my self this question so many times and still I don't have an answer. In my case only GOD knows how I made itPray
Politics is just things to keep the people divided and foolish and put your trust in men and none of them can do nothing for you...
Pierce
#196 Posted : Tuesday, August 13, 2013 3:01:36 PM
Rank: Veteran


Joined: 3/16/2009
Posts: 1,464
seppuku wrote:
seppuku wrote:
Wendz wrote:
seppuku wrote:
freiks wrote:
Have never had it in my pillow case nor in my bank, but i find myself owning property of more than 10m am i still a millionaire?


Of course you are. Unless you're in debt for an amount bigger than that - loosely speaking. It's a question of net-worth. The guy that was worth 10k this morning and took out a loan of 2m from his SACCO in the afternoon is still worth 10k. Yeye hapana millionaire. Na akionekana aambiwe awache kudanganya watu.


Thought he'd be worth -990K.... ama hii hesabu sio ya Carey Francis?


Hehehe! @Wendz, hiyo ni ya Waititu Form 1D. The fellow will add all of his 2m to his asset column and a similar (negative) amount to his liabilities column. Result? KES 0.00 increase in networth.


That being said I have since made my first one since I was last on this thread. smile

Method? Rather traditional. Kukaza mchipi na kuweka pesa kwa SACCO ni kama ninalipwa. Bought land a while ago and liquidated it recently (after 2 years) at thrice my buying price. Looking to turn that into a habit. smile


Interested in Land, do you have any contacts? Please email me on kymoney_1999@yahoo.com
mawinder
#197 Posted : Tuesday, August 13, 2013 3:24:10 PM
Rank: Elder


Joined: 4/30/2008
Posts: 6,029
Pierce wrote:
seppuku wrote:
seppuku wrote:
Wendz wrote:
seppuku wrote:
freiks wrote:
Have never had it in my pillow case nor in my bank, but i find myself owning property of more than 10m am i still a millionaire?


Of course you are. Unless you're in debt for an amount bigger than that - loosely speaking. It's a question of net-worth. The guy that was worth 10k this morning and took out a loan of 2m from his SACCO in the afternoon is still worth 10k. Yeye hapana millionaire. Na akionekana aambiwe awache kudanganya watu.


Thought he'd be worth -990K.... ama hii hesabu sio ya Carey Francis?


Hehehe! @Wendz, hiyo ni ya Waititu Form 1D. The fellow will add all of his 2m to his asset column and a similar (negative) amount to his liabilities column. Result? KES 0.00 increase in networth.


That being said I have since made my first one since I was last on this thread. smile

Method? Rather traditional. Kukaza mchipi na kuweka pesa kwa SACCO ni kama ninalipwa. Bought land a while ago and liquidated it recently (after 2 years) at thrice my buying price. Looking to turn that into a habit. smile


Interested in Land, do you have any contacts? Please email me on kymoney_1999@yahoo.com

Millionaire must have the money sio mashamba,camels,cows etc otherwise Turkanas and Maasais would be millionaires.What would you say of one who inherited 60 acres in Busia and an acre there goes for 100k yet it is the neighbours who graze cattle there while he works as a bodaboda rider.Will he be a millionaire?
Kwanini
#198 Posted : Tuesday, August 13, 2013 3:45:31 PM
Rank: Member


Joined: 1/28/2009
Posts: 353
Location: Cloud
Woyeee poor me... when shall i join the elite club of wazuwazi millis? Quite informative on how we value/view money! i learn something every day including that i could sell my kidney somewhere in mumbai and be an instant millionaire!
"For i am the master and the captain of my fate"
Wakanyugi
#199 Posted : Tuesday, August 13, 2013 4:19:12 PM
Rank: Veteran


Joined: 7/3/2007
Posts: 1,634
mawinder wrote:

Millionaire must have the money sio mashamba,camels,cows etc otherwise Turkanas and Maasais would be millionaires.


This is hate speech.

Many Masai and Turkana wazees are millionaires.

Wealth is about assets, not just cash.

The fact that Mzee Ole Mali has his capital on the hoof and you have yours sunk in the ground makes no difference, risk and liquidity aside.

In fact the cattle owner's assets are more liquid than your, 'bikapu or kapuloti.'
"The opposite of a correct statement is a false statement. But the opposite of a profound truth may well be another profound truth." (Niels Bohr)
murchr
#200 Posted : Tuesday, August 13, 2013 4:32:27 PM
Rank: Elder


Joined: 2/26/2012
Posts: 15,980
seppuku wrote:


Nope. Clothes are technically (depreciating) assets. The reason we don't include them in the balance sheet is that we expense them immediately when we buy them because they cost relatively too little to stagger. Bigger (depreciating) assets are expended over time through depreciation. If you are running a big hotel and you buy a huge amount of bedding, you'd probably put that in your asset column. If you buy two pillow cases with hares drawn on them because you think it will tickle your wife, you expense them immediately.

Disclaimer: I have never seen the inside of an accounting classroom. smile


So would J. Orengo value his suit as an asset? We'll... to me yes when he decides to sell it for whatever amount the buyer will give, that's the value of that suit once out of the shop.
The bedding in a hotel can be classified as an asset...customers check in.

@mawinder, land and animals are assets...so yes there are millionaires in Turkana Laughing out loudly Laughing out loudly Laughing out loudly
"There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
.
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