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Further
Reading ...
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How to Get from Market Niche to Passive Income in Three Easy Steps: Step 1, Your Customers - Kathy Gulrich
One of the surprising truths about marketing a product – a book, workbook, booklet, recording, etc. – is that the most effective marketing begins before you even decide which product to create. It’s easy to be successful if you remember the ART of...
Home based Business-Tips for Time Management - Lakshmi Menon
Unless we devote enough time for our home business we cannot expect to get positive results. Just setting up a home business is not sufficient. It will not run on its own. You may think that you are fully occupied with your home management and left...
Starting a Homebased Business - Valerie F Mitchell
First of all before you can become an entrepreneur, you have to have a passion in having a business of your own and unless you are willing to take risk and lose money, then you cannot consider yourself to be one. Getting into business takes lot of...
Simple Business Tactics Are Your Key To Success - Cathy Qazalbash
In a world full of complications sometimes we overlook the simple things in life. We are so busy trying to work out our twisted problems that we miss out on the simple secrets to success. The same can be said of our businesses. We get caught up in...
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Are You Financially Fit?
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Written By:
Abel Cheng
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When it comes to health, you go for a medical checkup to see if you're physically fit. The medical report will tell everything about your health.
But when it comes to wealth, it's as important that you do a regular checkup for your financial health. You need to know where you are financially before you decide what you want to achieve financially.
What do you do to ascertain your level of financial fitness?
You can use financial statements to determine your financial fitness. They are income statements and balance sheets.
It sounded boring and alien to me when I first prepared my income statement and balance sheet. The process is tedious as you need to dig out things and get them organized in a proper format.
But I can tell you once you've done this checkup, you'll have a clear picture where you stand financially and you can take the necessary measures to achieve financial freedom.
Besides that you'll be more in control of your money and know how to spend your money wisely.
Let's get started to determine your financial fitness.
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Income Statement
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First, you can prepare an income statement. An income statement is also called profit and loss statement. An income statement consists of two sections: monthly income and expenses.
Your income would probably comprise salary, rent from real estate, dividends from stocks and bonds, interests from savings accounts, and royalties.
Your expenses would be food, clothing, utilities, car loan payments, credit card payments, home mortgage payments, medical expenses, entertainment, insurance payments, charity, taxes, and education.
List down your income and expenses into each section accordingly. Then calculate your total income and expenses.
Once you've done that, it's time to calculate - continued below ...
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your net income. Net income is the difference between your gross income and expenses:
net income = gross income - expenses
If you have a negative net income, it tells you that you spend more money than you make. You'll have to have plans to reduce your spending or increase your income.
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Balance Sheet
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Next step is to prepare a Balance Sheet. Like income statements, balance sheets also have two sections: assets and liabilities.
Assets are your cash, real estate, car, bank accounts, stocks and bonds, mutual funds, retirement accounts, and businesses.
Liabilities include mortgages, credit card loans, car loans, personal loans, education loans, and taxes.
Prepare your own balance sheet by listing down your assets and liabilities. Calculate your total assets and total liabilities.
The following step is to calculate your net worth. Net worth is the difference between total assets and total liabilities:
net worth = assets - liabilities
Net worth is usually used to determine whether a person is wealthy.
You deserve a pat on your shoulder if you've come so far with me. By doing this simple exercise, you are one step ahead of many people.
You'd have known the level of your financial fitness by now.
So, are you financially fit?
To help you with this exercise, you can use our free money worksheet at http://www.financiallyrich.com/wealth-calculator.asp
About the Author
Abel Cheng offers small and medium enterprises exclusive global profits insider tips in his free publication, Abel Cheng's Business Diary. To officiate a bi-weekly subscription, please go to
http://www.abelcheng.com/diary.html
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| _Additional Resources ... |
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The truth about affiliate programs and how to make money on the net! - Mac
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Since I'm a web designer, I have a tendency to think everyone understands that having a website is important. Every once in a while, I have to remind myself that some people just haven't heard yet! Why is having a website such a big deal? Here are...
Cash Flow - Bob Osgoodby
It doesn't matter how great your product is or how wonderful your service, if you don't have customers, all you have is a skill, or a product. People don't go into business normally as a hobby, although a lot of hobbies do turn into a business. The...
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