Personal Finance
Are your finances healthy? Take test to find out
By Turtle_Investor  •  June 1, 2020
This test was extracted from an straits time article. https://www.straitstimes.com/business/invest/are-your-finances-healthy-take-test-to-find-out Let old turtle take the basic financial check of my family expense to see whether my family financial is healthy or unhealthy. Excited... let's start now!
  1. TOTAL DEBT SERVICING RATION (MONTHLY LOAN/SALARY)
Turtle family: 0% (Nil loan) Verdict: Pass (Recommended: Below 60%. Should aim for below 35%.)
  1. HOUSEHOLD LIQUIDITY RATIO (TOTAL CASH SAVINGS/TOTAL MONTHLY COMMITMENT)
Turtle family: 8.2 months Verdict: Marginal Pass (Recommended: More than 6 months.)
  1. CASH TO NET WORTH RATIO (CASH/ASSET - DEBT)
Turtle family: 261% Verdict: Pass (Recommended: More than 15% means) FYI, below 15% means you are asset rich but cash poor.)
  1. SAVINGS RATIO (MONTHLY SAVINGS/SALARY)
Turtle family: 51% Verdict: Pass (Recommended: It is prudent to save at least 10% of monthly pay)
  1. DEBT TO ASSET RATIO (TOTAL DEBT/TOTAL ASSET)
Turtle family: 0% (Nil loan) Verdict: Pass (Recommended: Below 50%. Should reduce loan exposure where possible) Conclusion: Turtle family passed all 5 basic tests to evaluate our financial health. These are really basic ratios and it doesn't take into...
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By Turtle_Investor
Old Turtle is 36 years old (as of 2019) DYI investor (married with 1 Turtle wife and 2 little Turtles) whom started my personal investing journey since 2006 with the main purpose of beating inflation and generating passive income for retirement.
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