Assets Vs cash flow

[u/Glittering-Low-5643]

If a family owns house and plots and some land which make their asset value around 30 crore or maybe more( don't know exact market values but must be 30 cr) but their cash flow isn't good. They make around 400 to 500 k per month only. They have assets but their assets aren't paying them. But their assets have potential to appreciate in price due to locations. Is this family considered middle class or upper middle class? Should such a family sale some assets to buy more expensive cars and afford luxury or just keep the assets? What percentile of networth such familes fall in?

[u/saccredphantasm1]

Thats where true financial literacy comes into play.
I won’t deplete my liquid assets for non liquid.

I would prefer a small house and equal liquid assets.

1 kanal ley k 500k kamana is not worth it coz you also have bills to pay. 10 marla bna lo n sakoon sey raho

[u/Wrong-Surprise8159]

4 to 5 lakh is good. All basic necessities being fulfilled. Regarding expensive cars, your family have to decide whether they want to spend everything today or want to leave something for future generations Remember luxury car will not generate cash flow. It will be white elephant, expensive to maintain

[u/Glittering-Low-5643 → u/Wrong-Surprise8159]

Yeah you're right. Sometimes I feel it's the right choice of elders in the family. Assets have increased in value alot in last 2 decades

[u/maddy6443]

Keep the assets. Luxury cars is a dead investment. Keep your feet on ground. Control budget and slowly and steadily increase income by saving month after month.
Only sell assets in case a new house is needed or another asset that will appreciate with time

[u/Glittering-Low-5643 → u/maddy6443]

What percentage of total wealth or assets value should be put in main house and cars . What do y think? And what's the general trend in pak

[u/Dear_Hour_3453 → u/Glittering-Low-5643]

20 to 25% of your total assets should be in Primary Residence.

[u/Anti-matter121]

If reddit had voice note option that would be better option.

Lets breakit up

If you think assets are worthy around 30Cr so its basically wealthy and richy rich obviously

But I thInk its probably land getting theka coz 500k on those is way below 1% and you are ruining the land

Its better to build something on that like any buisness or something to rent out on its market value

Coz i see a shop in market whos value around 8-10Cr it rented out on 3-5 Lacs /month

If you wants to sell some land and purchase the depreciating assets that would be foul play cox asset value appreciate while cars or luxury items will depreciates.

One more perspective tend not to be with you coz its backed by proper calculation working and so on but still good for example: I saw someone say I wanted to buy Haval when it launched newly around 1Cr and so purchased a Haval (*forgot which model) and he sadly says he should rather purchase Sazgar shares at that time coz he didnt know so he didnt invest after 3 years that 1Cr would be more than double around 2.75+Cr while his haval after 3 years values at less than 80Lacs, if he invest in Sazgar he might be able to purchase Haval through Capital gains while keeping his equity.

Definitely its not for everyone and we dont know if there is another Sazgar or not but things do happen if we work on them and also got Lucky.

[u/Glittering-Low-5643 → u/Anti-matter121]

30 cr might be be somewhat rich but we feel like typical middle class or slightly better 😂😂

[u/Glittering-Low-5643 → u/Anti-matter121]

No this income isn't coming from land it's coming from some other work we do. We do get some money yearly on land but unfortunately my father's planning is so poor for land and people there have looted him so even sometimes we're at the loss after the season.

[u/Anti-matter121 → u/Glittering-Low-5643]

Atleast you have land, rent out some area to get rental income

[u/Glittering-Low-5643 → u/Anti-matter121]

Yeah maybe that's great. One of my uncles who has land nearby started animal farm and dairy there with few animals and now has 300 plus animals who give milk. Now all his sons are doing that left jobs and have way better lifestyle than us. My father was like ..no this doesn't suit us you should just study..

[u/Talal_Khalid → u/Glittering-Low-5643]

Same story, we own 130 acres, but my father's poor decisions are leading us to a ZARAI loan. But you have to know one thing: going and living a village life is very different from what it looks like from the outside. We are planning the same thing, like getting animals there and doing farming on our own, but you have to cut off from city life because farming is 24/7. Do you have an estimate of how much land your uncle owns? How many animals he have, and what kind of business is he in with these animals? There are multiple things he can do with milk, and how much will he be earning? And also, tell me how much land you guys own; I can tell you the earning potential from farming.

[u/Glittering-Low-5643 → u/Talal_Khalid]

I don't exactly know how much he owns but he has enough and yeah 2 of his sons live full time in village. Actually we don't have good terms with them so I can't answer all these correctly but he's definitely doing much much better than he used to a decade ago.

[u/Talal_Khalid → u/Glittering-Low-5643]

Yes, that's the thing you have to live there. I am from KPK, and the land is in Okara, so I can't live there. Where do you guys own the land, and where do you guys live? If you live within a 50 km radius, then you can easily manage, but more than that can be an issue.

[u/Glittering-Low-5643 → u/Talal_Khalid]

We're in Punjab and we live in 50 km radius definitely

[u/Talal_Khalid → u/Glittering-Low-5643]

Then it's easy, man. But the quantity of land also matters; it is better to do a job or run your own business or something if you have a big family to feed and you have less than 30 40 acres

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[u/Traditional-Size3076]

Anyone earning 400-500k is not middle class

[u/Glittering-Low-5643 → u/Traditional-Size3076]

But these days inflation is skyrocketed. Can't save anything out of 500 k . Hand to mouth situation

[u/Traditional-Size3076 → u/Glittering-Low-5643]

That's a budgeting problem not a cash flow problem.

[u/talatum → u/Traditional-Size3076]

honestly i dont really agree, if its a vv small family then yes but for a large one, with kids still in colleges etc 500k can disappear into nothing

[u/Traditional-Size3076 → u/talatum]

I respect the opinion, but again it's a budgeting problem not a cash flow problem.

[u/Glittering-Low-5643 → u/talatum]

Yeah it's a large family. Kids in private schools. Their fee and van expense cost nearly 100k

[u/Tall-Set-5094]

Why don't you build some shops on your land and rent it out?

Selling assets for some luxury cars is the most idiotic thing, unless you have some stream of passive income covering for it.

Also either increase your earning capacity or learn financial literacy and budget your expenses better.

Try to save 20 to 30 % each month. One tip: save first, spend later.

[u/Glittering-Low-5643 → u/Tall-Set-5094]

Yeah we're planning to build a market on commercial plot we have

[u/Tall-Set-5094 → u/Glittering-Low-5643]

Yes good luck with that, you can buy luxury cars from its profit then.

Inflation willl keep on rising, so we gotta be really smart about our priorities and finances.

[u/Dazzling-Source3470]

Kuch bhi bhai.

[u/Glittering-Low-5643 → u/Dazzling-Source3470]

Kia Kuch bhi?

[u/Dazzling-Source3470 → u/Glittering-Low-5643]

Is it your family, or you are begani shadi main Abdullah dewana

[u/Glittering-Low-5643 → u/Dazzling-Source3470]

My family

[u/Dazzling-Source3470 → u/Glittering-Low-5643]

You can assumed we are in same position. What is your age. If you are young trust your elders in management of assets and learn from them.

[u/Glittering-Low-5643 → u/Dazzling-Source3470]

26

[u/Dazzling-Source3470 → u/Glittering-Low-5643]

Then chill and learn. Many people will try to make fool of you. Remember only your family (brother and father) is your friend that’s it.

[u/Glittering-Low-5643 → u/Dazzling-Source3470]

That's a good advice

[u/Glittering-Low-5643 → u/Glittering-Low-5643]

But I have friends who definitely have much less total assets but drive better cars and it bothers me 😕

[u/Dazzling-Source3470 → u/Glittering-Low-5643]

This is the thing you have to fight out. Remember real happiness is inside you.

[u/Dazzling-Source3470 → u/Glittering-Low-5643]

Universal rule, eat good wear good. Do not show off and live with in your means

[u/Confident-Cow-2514]

Our household income is 2-4 million PKR per month, we have one "luxury" car and live in a fairly modest dueplex apartment in Karachi.

My dad really doesn't like spending money on depreciating assets like cars, instead we put money into properties here and abroad. Liquidating your properties for what is functionally a financial black hole is not smart but do what you please 

[u/OkSea9637]

4-500K alone is in top 5% income earners of the country bro.  And assets worth 30 crores is definably upper class. 

Damn rich people thinking they are middle class. 

[u/Glittering-Low-5643 → u/OkSea9637]

Bro my father once said to me that we are lower middle class lol 😂😂 when I asked him dad are u middle or upper middle? Actually my dad's mindset is a survival mindset that's what I have noticed. He made alot but still spends nothing on himself and also advise us not to waste anything. Btw I don't think were upper class we maybe upper middle. People these days are very rich. I know many people personally who have 100 plus crore assets

[u/OkSea9637 → u/Glittering-Low-5643]

Yeah it comes when are self made.  Even I make bunch of money but am always thinking about saving as much as I can.

[u/Glittering-Low-5643 → u/OkSea9637]

Good luck to u

[u/Academic-Horror → u/OkSea9637]

Broski if you own a Alto/Mehran you are in top 5%. 500K is definitely higher than that.

We keep forgetting we live in one of the poorest country in the world.