So that your goal is financial independence. You’ve put up your budget and have found a method to start saving some money. So now what can you do?
I’m a basketball junkie and I enjoy watching games especially college games. Not in just basketball games in almost 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 don’t know if you are winning or losing.
The way to keep score in your financial world is through your net worth statement. This is really just the difference between your assets and liabilities.
A success building asset puts money into your pocket. It either increases in value with time or produces a return. A liability takes money from the pocket. Liability is just a debt, usually a debt owed to a company or to an individual.
To get your net worth you’ll need to put together your personal balance sheet or you’ll need to keep score. A balance sheet has two sides. One side could be the list of all your assets with a dollar amount. Another side could be the list of all your liabilities with a dollar amount. Simply put to find simply how much you are worth you start by adding up your assets and liabilities. Your net worth is the assets minus your liabilities. You really have just found your wealth. So what do you consider? Do you really need to keep score?
To take control of one’s finances you should do your budget monthly and your net worth one or more times a year. To have in the habit to do your net worth you need to do it either twice per year or quarterly.