Dollars and Sense 2- Budgeting, Residual Income, financial experts
Today I was listening to a show on NPR called Tell me more, when it transitioned to what I was looking for: A discussion on money. I regularly search for new music, I regularly browse blogs for inspiring things, and I daily, over and over again practice my craft. But what I do not do , which I am actually scared to do is get a better hold of my finances. There I said it. How many of you have this same fear? Or how many of you ignore the problem hoping it will go away? I know as I listened to a show with two financial advisors today I decided to write down their names and look them up. For some reason I did not think I would find any men of color who were certified financial advisors. I don’t know why, but I thought that.
The two men were Alvin Hall and Louis Barajas. Both gave solid advice on budgeting, understanding the stock market, but above all becoming more financially literate. So as a promise to myself I decided I would pick up this series of blogs with more insight as I find my way to a better financial literacy.
With that said here are some terms.
Dictionary definition: A budget is a quantitative expression of a plan for a defined period of time. It may include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows. It expresses strategic plans of business units, organizations, activities or events in measurable terms.
Definition from the advisors: A budget is not a diet. It’s not something to be feared, it is a plan. Lets say I want to be making enough as an independent artist to take a vacation (I know, sounds crazy, right?), or I want to purchase a life insurance plan for my child. The budget is a plan for how to get there and a way to look at where your money is going.
Dictionary definition: Passive income is an income received on a regular basis, with little effort required to maintain it. It is closely related to the concept of "Unearned income". The American Internal Revenue Service categorizes income into three broad types, active (earned) income, passive (unearned) income, and portfolio income.
My definition. Normally I do a painting and get paid for it once. Residual income is getting paid for that painting every time it is used. So instead of collecting one big check, and one big check only, I’d collect one big check and many many smaller checks over a long period of time.
Disclaimer: To those f you who are financially aware, who have saved enough for what ever they want, or are experts at this. These posts are probably going to be of no use whatsoever to you. This is for cats (especially artists) who like me are not yet completely financially stable or literate. I hope my journey can help yours.
LISTEN: Alvin Hall LISTEN: Louis Barajas