Week 10
In accounting, a balance sheet is a “snapshot” of a company’s financial standing. It’s kind of like saying, “Hey, this is where we are financially.”
A company will list its assets, its liabilities, and its equity. Equity is basically the difference between assets and liabilities. On the personal side it is very similar. To state it simply, you are worth what you have minus what you owe.
A personal balance sheet is a wonderful tool in personal finance. It tells you where you are financially, can provide a measuring stick with which to measure your financial progress, and it can help you make decisions about saving, debt reduction, and emergency preparedness. It is also essential in estate planning.
This month we’ll spend a lot of time establishing where you are. In the months that come, we’ll look at goals and develop a plan of action to make sure you are not one of the majority of people who retire without enough assets to continue living above the poverty line.
A company will list its assets, its liabilities, and its equity. Equity is basically the difference between assets and liabilities. On the personal side it is very similar. To state it simply, you are worth what you have minus what you owe.
A personal balance sheet is a wonderful tool in personal finance. It tells you where you are financially, can provide a measuring stick with which to measure your financial progress, and it can help you make decisions about saving, debt reduction, and emergency preparedness. It is also essential in estate planning.
This month we’ll spend a lot of time establishing where you are. In the months that come, we’ll look at goals and develop a plan of action to make sure you are not one of the majority of people who retire without enough assets to continue living above the poverty line.
To Do List
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O - Print off the Wealth Accumulation/ Savings page and place it in your next tab (should be tab 3, behind Risk Management).
O - Print off a copy of your Personal Balance Sheet if you already have one, if not... print off and complete our Personal Balance Sheet. O - Insert your Personal Balance Sheet directly behind Tab 3- Wealth Accumulation/ Savings O - Check out what others are saying about this week!!!! Click Here! |
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Extra Credit
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O - Send this joke to your favorite accountant:
There once was a business owner who was interviewing people for a division manager position. He decided to select the individual that could answer the question "how much is 2+2?" The engineer pulled out his slide rule and shuffled it back and forth, and finally announced, "It lies between 3.98 and 4.02". The mathematician said, "In two hours I can demonstrate it equals 4 with the following short proof." The physicist declared, "It's in the magnitude of 1x101." The logician paused for a long while and then said, "This problem is solvable." The social worker said, "I don't know the answer, but I am glad that we discussed this important question." The attorney stated, "In the case of Svenson vs. the State, 2+2 was declared to be 4." The trader asked, "Are you buying or selling?" The accountant looked at the business owner, then got out of his chair, went to see if anyone was listening at the door and pulled the drapes. Then he returned to the business owner, leaned across the desk and said in a low voice, "What would you like it to be?" |
