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• Productive assets are investments that internally throw off surplus money from some sort of activity. 

• Each type of productive asset has its own pros and cons, unique quirks, legal traditions, tax rules, and other relevant details.
• The three most common kinds of investments from productive assets are stocks, bonds, and real estate.

• It means investing in common stock, which is another way to describe business ownership or business equity.
• When you own equity (the value of the shares issued by a company) in a business, you are entitled to a share of the profit or losses generated by that company's operating activity.
• Equities are the most rewarding asset class for investors seeking to build wealth over time without using large amounts of leverage.

Assuming you're in your 20s or 30s and can earn an average investment return of five percent a year, you'll need to save about 20 percent of your income so you can reach financial independence when you're older.

Financial independence means that you can maintain your chosen lifestyle entirely from the interest of your investments and dividends.

The four percent rule states that you could withdraw four percent of your principal balance every year and live on this indefinitely. That means you need to save 25 times your annual expenses to become financially independent.

The four percent rule is not perfect. There is no risk-free investment that yields that much today. Sudden inflation could also cause a problem.

Many singles don't have a strong enough backup plan to cover the costs of a major illness or other problems.

Ensure you have enough cash on hand to cover emergencies. For singles, the aim is between nine and twelve months of living expenses in a savings account. As you near retirement, consider bulking up to at least two years of living expenses.

Group long-term disability policies offered by employers typically replace up to 60% of your income.

To ensure you have enough coverage, aim to bring your total coverage up to 80% o 90% of your take-home pay, including bonuses and commissions.

The two big reasons to refinance are:

• To reduce your monthly mortgage payment
• To save on the overall interest you will pay on your house in the long run.

Refinancing does not always reduce the monthly payment or save on the overall interest.. A loan officer or mortgage broker can help you run scenarios that show you the cost and potential savings of refinancing.

Generally, it makes sense to refinance if you plan on staying in your home for many years.

If you plan to sell the property soon, don't refinance. Refinancing could take years to break even and begin saving you money.

Bad investing advice can come from many quarters, such as wealth expos or financial advisors. If anyone promises you any type of return over 12%, 99% of the time, they are probably playing you.

There are great financial advisors out there, but many people who sell investment products just want your money. However, it's not that hard to invest for yourself.

1. Never buy a financial or investing product from someone you just met.
2. Getting returns over 12% per year is ridiculously hard. If it sounds too good to be true, it is.
3. If you don't understand it, don't invest in it.
4. If one of your friends recommends an investment that's making them a lot of money, they are probably suckers too. If you see the "results not typical" on any marketing materials, move on.
5. There are no "secrets of the super-wealthy" that anyone will sell you for $500 or that you can take advantage of unless you have hundreds of thousands of dollars.

In the debt avalanche method, you pay your debts from the highest interest rate to the lowest interest rate, regardless of balance.

You will pay less in interest if you pay off your debts in this order. You will also pay it off faster.

The supporters of the two methods are both enthusiastic about which one to use. However, it barely matters which system you use. The best approach is the one that keeps you motivated.

Make the minimum payments on all of your debt. Then, focus on one debt that bothers you the most and put every dollar you can towards it until it is gone. Then move on to the next debt.

There are a couple of paths you can take to pay off your high-interest debt when you're on a tight budget.

• The snowball method. For those who need to see progress, pay off the lowest balance first. You'll feel inspired to keep going.
• The avalanche method. Choose the debt with the highest interest rate to pay off first. This may require larger monthly payments and will take longer to see progress, but you will save the most money in the long run.
• If you need to prioritize your credit score, focus on paying down your credit cards first. Paying the ones you are near to maxing out will improve your score quickly by a few points.
• Set up payment plans, even if you can only afford a few dollars at a time. That way, your lenders can see you're paying something.

Financial professionals will advise you to cut out expensive nights out. In truth, you will have night's out, even when you're dirt poor.

To incorporate unplanned entertainment, set aside an amount each month. Be realistic. You can open another savings account for fun spending or you can use cash only.

“Great wealth builders focus on both saving money and earning more.”

1. Save on vehicles. Before buying a car, investigate vehicle reliability, pricing and financing.
2. Rent. Most rentals offer more flexibility in case you need to move. Also, not having the mortgage payment allows you to start saving earlier.
3. Don’t be a consumerist, buy only the things you really need.
4. Save a percentage of your income so you have more money to invest.
5. Work hard on your current work regardless of your feelings for it. It’s easier than finding a new great opportunity and may lead you into a promotion.
6. Educate yourself even if it doesn’t bring any immediate benefit, being educated opens new opportunities on the long run.
7. Invest in yourself and your marketing to open up new opportunities.
8. Being an entrepreneur is the best way to maximize your earnings, short of being an investor. Try it, even if it fails the learning from it will be invaluable in your next attempt.
9. Real estate won’t make you rich overnight, but it’s a solid strategy to increasing your network.