Your Financial Statement
Now a few more tips on financial independence. If you haven’t
done it in a long time, put together a financial statement on
yourself. A financial statement is simply a piece of paper divided in
half. On one side is all the list of your assets, the value of your
assets. On the other side of your paper is all that you owe, called
liabilities. Then you subtract one from the other and that is called
your net worth.
Mr. Shoaff asked me, “Have you put together a financial
statement recently?” I said, “I never have put together one.” And he
said, “Well, now’s the time to do it.” And I wasn’t too happy about
putting together that first one and said, “Well, it’s not going to look
that good.” And he said, “It doesn’t matter how it looks, you have to
have one. To get where you want to go you have to first know where
you are.” To say, “Where am I?” Without kidding anybody.
This first financial statement - you don’t have to publish it in a
public record. It’s for your own private eyes to see. But you have
to see where you are. Take a look. When I put my first one
together I had no problem with the liability side. That was a long
list, the finance companies, they were all on there. Money I’d
borrowed from my parents, it was all on there. On the asset side
though I really started scraping the bottom of the barrel. I put the
value of my shoes on there; I put shoes at ten bucks at least. I
mean I’m scraping, so I won’t look so bad. So, if you’re putting
together your first one, whatever you have to do, make it look as
good as you can. But also, make sure it’s accurate. Make sure you
take a good look at where you are.
Now then, play this financial independence program like a
game. Be delighted in reducing your liabilities and increasing your
assets. Once I got the hang of this I started putting together a
financial statement about every thirty days, sometimes even less. If
I knew the picture had changed quite a bit I’d draw up a new
financial statement. So I could put away the old one. Here’s my
new one. You just play it like a game. And then learn to be excited
about reducing your liabilities.