PERSONAL FINANCE 13: WAY FORWARD FOR INDIVIDUALS OR HOUSEHOLDS WITH NO EARNING ASSETS 1

The most obvious way forward for individuals or households with no Earning Assets as can be seen in the relationships among the Personal Balance Sheet, the Personal Income Statement, and the Personal Cash Flow Statement:

is TO SAVE; i.e., to make sure that your Manhours generate enough of a Salary or Professional Fee to cover sufficiently your Direct Costs, leave enough of a net after Direct Costs to cover all your Expenses, leave enough to generate a positive Net Inflow which results in an Ending Cash position that increases your Savings Account.

The worst case is if you have to borrow to cover Expenses, i.e., you are not generating enough of a net after Direct Costs.