Precise definitions for words must exist to ensure clarity and understanding. One of the reasons the world of finance and tax is so confusing and unnecessarily complex is due the constant changing and twisting of keywords. Legal battles are often no more than a battle to change or enforce the meaning of words. Therefore, great care has been taken to clearly define the Rich Habit terms, to ensure that you can apply these techniques and indeed, make them a habit!
A word of advice: If Rich Habit terms conflict with your own ideas of the word, or even if they conflict with the dictionary definitions, use these Rich Habits definitions instead, for this simple reason—they are workable.
Solvent is having more assets than debt; it means being able to pay one’s debts and bills in full.
Viable means your income is greater than your expenses.
Rich is being abundantly solvent and viable.
Broke is having no money left over. Zero solvency and barely viable.
Poor is being insolvent and unviable.
Rich Continuum is a continuous sequence or journey from Poor to Rich in which adjacent levels are not perceptibly different from each other, although the extremes are quite distinct and obvious. The main levels are Poor, Broke and Rich.
Assets are anything that has the potential to increase in value or provide an income and can be easily sold and converted to cash.
Investment debt is money borrowed to buy assets that increase in value and/or provide an income.
Killer debt is money owed that is not backed by assets. It includes overdue or unpaid bills.
Debt is what you owe.
Allocate means separating money for a specific purpose and using it only for that purpose.
Money Received is the total amount of money received for a given period, such as a week or month.
Unusable Income is money received that does not belong to you and must be set-aside before any other allocations occur.
True Income is the remainder leftover from Money Received, after Unusable Income has been removed.
Invest is using money to buy something that provides a profit or income or both.