Introduce the concepts of Spender, Saver, and Wealth Creator. |
When it comes to purchasing strategies, there are three common types. The first is the Spender. The spender has no liquid assets and has no other choice than to borrow from a financial institution then making a major capital purchase. (A major capital purchase is any purchase that cannot be paid for, in full, using normal monthly cash flow.) Next is the Saver. The saver prefers to save toward a major capital purchase and then pay cash. The saver must then save again for the next major purchase. While the saver does not pay interest to a financial institution like the spender, the saver forgoes earning future interest on the money consumed by the purchase. Finally there is the Wealth Creator. The wealth creator saves to build up a continually increasing pool of capital. When a major purchase is required, the wealth creator is then in a position to choose how to finance the purchase at the most favorable terms and rates. |
No math presented on this screen. |