Where are you now, financially?

Click on the above picture to see an example. It is very important to your financial well being to know where you are now. You do that with a financial statement. Please look at this example and note the following definitions for some of the fields:

• %kept - % of money kept after expenses

• %of Net Worth Liquid - % of Net Worth easily convertible to cash

• %money working - % of money invested

• Debt to Income - monthly debt expense to income ratio in %

• %inc to taxes - % of income used for taxes

• RD Wealth Factor - times passive income can cover expenses

• %On Housing - % of income used for housing exp

• Return on assets - passive monthly return annualized

• %DoDads - % of net worth not income producing

• Wealth in years - number of years you can live on assets
  

• Assets - items that provide positive cashflow

• Liabilities - items that provide negative cashflow

I would suggest that you fill out three monthly financial pages.

1. your current financial statement
2. a budget of where you want to be in one year
3. a budget of where you want to be in 5 years

The name of the game is to get out of what Kiyosaki calls the "rat race". That is to have your passive and portfolio income greater than your expenses. If you do that the RD Wealth factor will be over 1.

I have a spreadsheet that will do this, but as you can tell it is very simple to come up with one of your own so you don't have to use mine but just get it done.

Hope this helps,
Glen