So your goal is financial independence. You’ve put up your allowance and have found a way to start saving some money. So now what would you do?
I’m a basketball junkie and I enjoy watching games especially college games. Not in just basketball games but in virtually every game there’s people keep score industry Sean Connery’s Net Worth. That is the thing you need to do because if you may not keep score you never know if you should be winning or losing.
The way to keep score in your financial world is through your net worth statement. That is really just the difference between your assets and liabilities.
A success building asset puts money into your pocket. It either increases in value as time passes or produces a return. A liability takes money from the pocket. Liability is just a debt, usually a debt owed to an establishment or even to an individual.
To find your net worth you’ll need to construct your individual balance sheet or you’ll need to help keep score. A balance sheet has two sides. One side could be the list of most your assets with a dollar amount. One other side could be the list of most your liabilities with a dollar amount. To put it simply to find how much you’re worth you start with the addition of up your assets and liabilities. Your net worth is your assets minus your liabilities. You actually have just found your wealth. So what you think? Do you need to help keep score?
To assume control of your finances you have to do your allowance monthly and your net worth at least one time a year. To get in the habit to do your net worth you should take action either twice a year or quarterly.