Thursday, April 10, 2008

Rule # 6 Watch The Money

“She considers a field and buys it; out of her earnings she plant a Vineyard.” “She sees that her trading is profitable, and her lamp does not go out at night.”
Proverbs 31:16, 18

Planning, researching, considering, monitoring, tracking, and recording, are all traits that create, preserve, and growth wealth.

Businesses that are publicly traded are required by law to report to their owners on a quarterly basis. In that report they tell us how they did compared to last year, and compared to the plan they laid out at the start of the year.

There is no business more important than the business of you and your family, so the least we can do is report to ourselves on an annual basis.

If you plan to eventually become self sufficient, that is no reliance on a job for income, you need to start tracking your progress, or lack thereof, immediately.

This is a very simple process that can be done on paper or with a spreadsheet. You list your assets (appreciating assets only) and your debt (all debt). You then subtract your debt from your assets and you find out how much you are worth.

If this number is negative you have some work to do. You must do this on an annual basis on the same date each year. The goal is to make sure your net worth is increasing each year.

The other document that should become critical to your existence is a spreadsheet used for tracking expenses. This is easy once you have it set up, as you can add items into a cell and have the spreadsheet do the math for you.

The only way to find out how much you spend, and where you spend it, is to track it. Of all the methods I have tried I have found with online banking and a spreadsheet it is a very quick, easy, and relatively painless process.

This is your life, you should be concerned.

1 comment:

Trading said...

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