6 Questions to Test Your Wealth-Building Strategies: Review by Automatic Millionaire David Bach


If you want to test your own financial habits against the backdrop of recommended wealth creation strategies, the answers can help you start building wealth in your life. How is it possible that an ordinary couple with a regular income created extraordinary wealth by becoming multimillionaires and retiring at fifty?
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This is the premise of David Bach’s “Automatic Millionaire,” one of the 12 best-selling books in personal finance. The strategy he presents is not as far-fetched as the story looks.
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Instead of focusing on increasing income, increasing expenses and looking rich, if you switch to saving money, making smart investments, you can become very rich – and sooner than you might think. It’s easy to read, but people find it difficult to implement in an increasingly materialistic and credit-oriented culture.

As a regular at the Oprah Winfrey Show, David Bach is no stranger to the personal finance industry, at least in the US. But what sets it apart from many experts is the direct strategies it can make so that anyone can get rid of debt and create wealth in your life.

Here are six questions you can ask yourself to start your own wealth building strategies and end your life rich.

1. Do you want to be rich?

This is not a tricky question. But the real question is to ask yourself WHY you want to get rich.

When you clearly define your goals, you wake up hungry to accomplish it, and most likely you will do the work and make sacrifices to achieve them.

2. Do you pay yourself first?

This is the number one financial decision, but few of us do it, and of course we don’t automatically. If you make a dollar, the first person to pay is YOU. First of all, pay yourself, so save money for taxes, retirement accounts, savings, many of which are not taxed!

The rule is to pay yourself one hour of invested income – about 10-15% automatically for life. (On average, domestic workers actually earn only 10 minutes a day – about 2% – which is shocking and frightening.)

3. Do you know your Latte factor?

The average American and probably European spends about $ 10 a day on occasional purchases, such as buying lattes and pastries before, during and / or after work, perhaps a pack of sandwiches, salad and a drink at lunchtime. If that’s not the case, it’s a magazine or extra CD that takes the chocolate to the gas station.

That’s $ 10 a day is $ 3,600 a year (assuming you’ll have a latte ratio not only on weekdays but also on weekends). If you put it off instead, it will really get stronger – and it will impress you.

Expect it at about 8% annual growth over 35 years, it’s actually a staggering $ 1385,505 – over a million dollars – on coffee! Wait another five years and that would be an incredible $ 2,108,569.

The strategy here is to realize what your occasional latte purchases are, reduce them or knock them out and pay yourself instead.

4. Do you rent or own?

If you pay yourself first – this is the number one financial decision, then the number one investment decision – is to buy your own home. This is the main wealth creation strategy you can use. Homeowners are 40-50 times more expensive than renters.

The secondary strategy is to pay off the mortgage as early as possible by overpaying and thus saving huge amounts on interest payments. But the third part of this is that once you pay about half, use your equity to buy another property of the same value and rent.

For a 15-year fixed-rate mortgage, interest rates are as low as they can always be, and easier than ever, to benefit and create wealth in your life. In fact, using a biennial payment plan can save more than six figures in 15 years!

5. Do you have debts?

If you are going to truly work to make money, you should make sure you have a plan to keep them! The only economy you can control is your personal economy, so reduce your debt by repaying it from the beginning and little by little. It’s easier and less stressful than trying to repay large lump sums.

6. Are you coming back

When your personal finances are stretched, it seems very difficult to consider any level of tithing. But it is a healthy habit and pays you a lot. This is another kind of wealth. When you experience happiness and satisfaction on a deeper level, you are much more open to opportunities that you would otherwise never notice.



Timing markets


Time or timing in the markets

How important is it for investors to tariff markets?

I know a retiree who cashed a pension for buying a car at a time when the markets were hot. That was in February 2020, when covid-19 began to spread around the world. The following month, markets began to slip. I told him, “No wonder you’re smiling.”
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It’s more luck than good management, but you might consider it a good term, even though it was a coincidence.

There are other cases of investors who are not so lucky.
One was an investor who, during market growth, switched from growth funds to conservative funds, finding that they missed out on all profits when the market recovered, losing thousands.
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Another investor who used part of the pension funds to contribute to the house, as can be done with Kiwisover – a scheme of retirement savings in New Zealand. This sounds normal, but they withdrew the amount they were able to get at a time when markets were falling and losses were said to be fifteen thousand. Just like another investor who changed funds, this investor also made a profit when markets recovered.
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The real estate market in New Zealand went crazy during 2020 due to the number of New Zealanders returning home and buying houses. A lot of people jumped on the property while shopping. The FOMO factor operates here. FOMO, for those who don’t know, stands for “Fear of Missing”.
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A common theme that stems from all this is that the real estate market is not available to first home buyers. It is still important for people to build up their active base and find alternative ways to invest their money because having assets behind puts you in a financial position for what comes next.
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The main thing in investing – to do it right. You will not invest in growth funds if you are going to use the money for another purpose in the short term because markets may fall just before you withdraw money. On the other hand, if you have time on your side, then investing in riskier funds may be an option if you have the temperament to cope with volatility.
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The investor must decide whether this money will be used in the long, medium or short term, and set appropriate goals. The investor’s risk profile is another factor to consider; it’s easy to become an investor when markets go up, but if the rate of stock growth will cause you to lose sleep, you need to be a little more conservative.
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An investor who switched to more conservation funds when markets moved south, and made a profit when he recovered, allowed his own emotions to improve them. It is important for investors to overcome themselves and teach themselves to invest with the right mindset.



How to invest time instead of money to earn passive income


If you’re like most people, you know that investing is a great way to build wealth. However, most believe that in order to become richer, you need to be rich. But there is another way. This is what entrepreneurs without start-up capital are doing to move forward.
The sweat of justice and the sweat of profit

Have you ever heard of capital sweat? The action of sweat is a contribution that we make to the project by our own efforts, as opposed to buying a share for our money. Fair sweat can also be a value we add to our property, but we’re not talking about that kind. I bet you have a lot of such funds for sweat, but the problem is that you won’t pay you dividends until you sell the house. Investing in sweat stocks can not only be profitable, but also have a much higher return than capital investment. However there is a catch, you have so much time a day. That’s why it’s so important to focus your sweat on things that will not only bring you profit now, but also further increase profits.
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Sad capital is the effort that adds or produces an asset
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Most people think that an asset is acquired only. But this is not the case. Here is a list of assets that produce money and that can be built with a share of sweat.

  • Writing a book
  • Writing a song or album
  • Product creation
  • Creating an educational training course
  • Building a network
  • Building a customer base

All of these things can be built with sweat in mind and can continue to pay you long after you do the work.
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The rich get richer and the poor get poorer, they say. I used to believe that when working for someone else. It was the second stupid thing I ever did. First of all, the stupidest applied for a job. After I gained access to the financial data of the company I worked for, I found that smart people are getting richer. Others are grateful for the pay rise to cover inflation.
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Time to make a plan B

Employers have moved from the idea that an employee is a long-term asset of a company, someone needs to be educated and developed, to a new notion that he is a one-time employee. Before the boss can dispose of you, you need to find a way out of the relationship.
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Don’t joke yourself thinking that the boss loves you for what you do, or that the company plans to keep you comfortable forever. Nowadays it only happens to horses that have given the maximum. You are where you are because you are a machine for making money. The only problem is that you don’t make money on yourself.
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Network and customer base development

We are not best-selling authors, musicians, product inventors and leaders of educational thoughts. All of these ways of using sweat to build capital require talent. However, we do not require special talents, because all you need to do to start investing, making an effort to create justice – is to build a network.

Anyone can build a network.

Virtually everyone already has a network. They just don’t have the machine to turn that network into a money-making asset. If you want to learn how normal people, like you, use the power of networking to have more time, make a passive income and make your own schedule.


How To Quickly Make Money In 2 Easy Steps Online


While it’s not realistic to assume that you can become a millionaire in two weeks, there are a few proven legal ways where you can make money fast.

All you really need is a decent online service and you can start using your skills to earn a few valuable dollars.

There are a number of well-known websites that offer you the opportunity to make money quickly without leaving home and without leaving it. In addition, you can choose the working time and the amount of work you will be able to perform.

Amazon mechanical Turk

This is a job site designed by guys from Amazon, and if you are a programmer, designer or writer, you can choose from the huge amount of HIT available on this site. HIT stands for Human Intelligence Task. A good part of using Amazon Mechanical Turk is that you are guaranteed protection against online fraud, such as identity theft, given Amazon’s high reputation.

You need a valid email address plus an Amazon payment account to start making money. The more HITs you can perform, the more likely you are to complete tasks that offer higher pay. AMT has an automatic tracking system that monitors your percentage of accepted and rejected work, so pay attention to quality.

Payment for work performed is processed as soon as the person who applied (the customer who wants to do the work and who has contributed money to Amazon) is satisfied with what you have done.

Buying and selling on eBay

You can easily make money on eBay if you know how. The first step is to visit the website and open an account online as a buyer or seller. It’s free. There are two ways to make money fast on eBay:

1. Sale: Offer to sell goods to people you know. For example, once you feel on eBay and understand how it works, you can offer to sell goods to friends, family and relatives. You can earn a decent commission for yourself while getting a good deal.

2. PurchaseA: You can try to invest small amounts of money in buying popular items on eBay and then selling them at an inflated price (while maintaining an attractive price for customers). The best way to determine which items are most popular is to check how many offers for a particular item. The greater the number of applications, the greater the demand for the product.

Making money online should not involve complications and large investments. Starting small is a great way to feel free without wasting valuable resources.


Ponce Shmonzi, "Caveat Emptor"


I feel sick from the victims of Bernard Madoff, those who lost everything. They want to know how to compensate for some of the losses. They believe that taxpayers should help them out, for sure. Why not, it’s good enough for B. with A. They want to know how Bernie got away with his “Ponzi” scheme. He left because of the blind greed of (his) investors. That’s right. If you are investing in a fund that returns an unrealistic return, guess something out there is unrealistic.

GOLDEN RULE: If it’s too good to be true, it’s not.

I have money in a mutual fund that has been paying back 200% for several years. Guess I lost it in this recession. But I don’t have all the money. I have money for gambling. INVESTMENT IS A PLAYER! It so happens that investing money is 70 years old. Investing in the stock market has achieved more than investing in real estate, over this period of time (with an average annual return; look), to participate in this you need much less money. One can also easily defeat the market. I do this every year as a non-financial genius.

Your investment strategy is your responsibility. B. Madoff, AG Edwards, Fidelity, Edward Jones, Val Kilmer or Batman are not responsible for your financial future.

STAY DIFFERENT! Don’t invest all your money in a return fund that exceeds the norm. Conduct due diligence and research. Hotter than usual, the funds will be colder than usual. They should be seen as “growth” and not as “income”. I bought growth stocks that went to zero. So my “growth” was negative, but I knew there was a chance to get into the deal. I put a small amount of gambling money in the wrong bank. I lost money on Growth Mutual Funds. But I still had to put off another 48 investments.

If you’ve been 100% invested in BM (hmm, what else does that mean?), You deserve what you got, period. Part of that money was to gamble on Pepsi Cola. Or even lottery or slot machines. Shame on Bernie, but shame. People who have been abused may find themselves in the wrong place. Nicole continued to live next to the coolant

As a sidebar let me recommend “American Funds” (they also lost the report as a result of the recession). They use a team approach. It is unlikely that the 8 people who control the fund will make the same mistake. That would be clearly questionable, and the investor had to admit deception. The American has existed since the 1930s and will likely be around when Bernie is released from prison. He should consider investing in Am. Fds. in 2160 when he was released. An investment of $ 1,034 in one of their original funds in 1934 (with reinvestment of dividends, which is very important) is worth 40+ million. today. A house of $ 10,000 in 1934 today costs about $ 50 million?

Sidebar №2: The stock market is always responsive. If you coincide with a drop in the stock market in percentages (as if the Dow 14,000 was ever realistic), the unemployment rate should be much higher than during the Great Depression. This country should be 58% of what it was 2 years ago. Pfft! There is no relationship between the market and the reality of the economy. BUY OK and hold. Look for companies that have actually collected dividends in a financial disaster. Did you think there were none? So you are not doing your job.


Online sweepstakes – tips on how to log in and win it


Are you bored for life? Do you need to do something interesting? How about picking up something so you can make money, and at the same time reduce your boredom. Try online sweepstakes that bring fun and benefits. All you need is a computer with an internet connection and enough time to spend on it.

Draws are games funded by the companies that award the prize to the winner by playing a contest to attract customers to their products. Purchasing a product is not required and does not increase the chance of winning a game or contest. Different raffle contests offer different prizes, t-shirts, mugs, etc. home, apartment, etc. Contests with the biggest prize often attract most players.

There are many types of raffles online. Local or regional draws are those that are limited to the region, which means that the number of participants will be limited, and the chances of winning are thus increased. Another such totalization with limited access is a totalization that most people do not bother and do not spend time on. Skill-based draws are simple for those with writing, photography or anything that requires a competition, and competitions will be limited.

There are channels or products that provide unique codes to enter the contest, between programs or on the product cardboard box, respectively. All you need to do is follow the vendor’s instructions and enter the code to enter the contest. This type requires basically a purchase or you will be told to send mail or postcards to get the code. Most competitions are limited to one-time participation, while others may participate more than once.

The rule to keep in mind when participating in the draw is that not all competitions are the same and victory is not certain. You must know all the rules, terms and conditions of the contests before participating in it. It’s great to take part in many raffles at once. Most contests will have a promotion period and you must fully focus on the contest to get the prize. The promotion period (days or hours) of the competition is determined by the companies financing the draw.

Instead of participating in a contest that accepts millions of entries and selects a single winner, choose those who have limited choices, such as a regional, select audience, or challenging draws. The next thing to remember: be picky about the information you provide when participating in the contest. This information will be used by sponsoring companies to promote their products.

To find the raffle, the main and simple step is to search on Google or other search engines. There are also various websites that offer links to go directly to current contests. These websites are the best options for reliable sweepstakes. Some sites are free but interrupt a lot of advertising, while others ask for payment for their services. Choose the right draw wisely and enjoy the prizes won.


Apart from employee property: a critical cure for America’s Boom / Bust economy


If you work for a company that has an employee share ownership plan (ESOP), you have the option to purchase shares in that company while repaying a loan for your capital assets using future earnings (from dividends instead of your savings account or a second mortgage on your at home) and with dollars before tax (which dramatically speeds up payments). In investment circles, this strategy is known as the use of purchase (abbreviated LBO).

As a result, once the loan is repaid, you will receive two streams of income, one from your salary or earnings and the other from dividends received by your new possession. It either increases your home payment, or allows you to save for retirement, college for kids, or have a rainy day fund in case the crown virus strikes again. In a well-run employee-owned company, ordinary employees often retire with a lot of money in the bank.

Even more up …

So what does employee ownership do for a company? For starters, as all owners, it eliminates conflicts between employees and executives that often undermine the effectiveness of habitually organized companies. You’ve actually teamed up on the ownership side in the book to make traditional conflicts between employees, managers, and owners unreasonable. The absence of conflict tends to strengthen and stabilize the company in the future.

It also democratizes the workplace. It systematically counteracts and hinders concentrated wealth. That is, because employees are also owners, they have the right to comment on how the company works by voting for their shares for representation on the company’s board of directors. In well-run employee-owned companies, you won’t find executives who are paid 300, 400, or 500 times more than the lowest paid employees in the warehouse.

Managers in management are still needed. However, much more involvement in planning, problem solving and decision making by frontline workers than in conventional companies. All this leads to a higher level of mutual respect and greater company profits.

Everyone pays for rapprochement!

And since all owners, financial incentives literally pay everyone to go together, in the same direction, to go to the same goals at the same time. If a company wins, everyone wins, not just the few at the top. And if a company loses, everyone loses, not just those at the bottom. As a result, the efficiency and sustainability of the company (especially in difficult economic times) is maximum, and turnover is predictably reduced.


Although there are about 8,000 employee-owned companies in the U.S. today, with 11 million employee owners, the problem is that they are still a rare exception rather than the rule. Thus, employees of companies that have common property (even those who have stock options) do not have the ability to use future income to repay loans when purchasing capital shares in the company. Even if they were allowed to buy money from their company, they would need access to the funds they needed. And today most workers lack that access.

Moreover, public sector employees such as teachers, police and fire officers, as well as the armed forces remain out of focus. So are women who work hard raising children or caring for elderly parents. That is, most Americans lack a systematic opportunity to participate in the (usually predictable and profitable) part of property in the economy because so many people live on wages to feed their children and pay rent / mortgages. This deprives so many people of the opportunity to benefit from property in our economy. In turn, it also widens the welfare gap that threatens to kill what is left of American democracy.

The $ 4 trillion idea whose time has come

In this light, let’s recognize that the average U.S. economy is growing at $ 4 trillion annually. That means about $ 12,000 annually for every man, woman and child in America. But in general, who benefits from this annual increase? Obviously, those who can afford to buy stocks, real estate bonds, technology, etc. will benefit the most.

Here I want to raise the question: how can we give the ordinary American citizen systematic access to property in the economy? How can the average Joe access this predictable $ 4 trillion growth to get a second stream of investment income while ridding of the fear and instability that so many Americans suffer in today’s incredibly balanced economy?

Paying Americans to Unite …

Consider this. What if the Federal Reserve through local banks issued $ 12,000 annually? assets? It would cost NOTHING to American taxpayers. It does not create public and consumer debt! And instead of creating a currency with government debt, our money will be backed by real, productive private sector assets

And it will not be inflation. All the money created will be secured by the full value of private sector assets that citizens will receive insurance loans to purchase. Citizens are actually buying recently issued full dividends, voting shares of companies that need new capital assets to grow. However, it can give every American citizen equal access to property of the American economy. This will help democratize the free market. In this moment of political division and strife, Americans are literally being paid to unite simultaneously in one direction towards the same goals!

It systematically opposes concentrated wealth!

Over time, every American citizen will accumulate more equity (instead of debt) and benefit from their investment income in a way that only the wealthy can do today. As a result, the need for social safety networking programs supported by federal organizations (e.g., Social Security, Medicare, Medicaid, food stamps) will gradually disappear. More people will be able to pay taxes, which in turn reduces the burden on those among us who still pay taxes. It systematically counteracts / hinders concentrated wealth and democratizes America’s economy!

Today’s crisis would not be a crisis

If the Obama administration had introduced the “Property of Capital” after the 2008 crisis, today’s COVID 19 / Unemployment crisis would not have been a crisis. People could afford to stay home and still have an income to survive a much less severe storm. Trump has the same opportunity today. Let’s see if he really wants to make America great again.

Capital manor in detail

I confess, this comment is a generalized portrait that requires more detailed information. So, for a full and detailed explanation of how this strategy could be outlined, go to the CESJ.ORG website and check out the concept that Dr. Norman Courland calls Capital Homesteading. This is a brilliant idea, whose time is long overdue. And that’s one very good thing that can actually be realized as a result of this horrible COVID 19 crisis.


Generational Wealth – 3 Tips for Creating, Creating and Protecting Your Family’s Generational Wealth


Most of the western world is bankrupt. Wealth of generations is a term we all need to know and understand. For most families in the Western Hemisphere, this is unusual thinking, but if you explore the eastern parts of the globe, you will find examples of the richness of generations spanning centuries, not just cycles.

A simple definition of the wealth of generations is “the transfer of stable significant financial resources to future generations.”

Here are 3 tips for creating, building and protecting the wealth of your family’s generations.

Tip №1 – Gain wealth on something that holds or increases value

Physical assets such as land, art and gold outperform and outperform riskier paper assets such as stocks and bonds. Indeed, stocks can work well over a long period; stocks, bonds and even cash include some third party requirements. Every paper currency in the history of the world has ultimately proved useless, and there is little reason to believe that the current champions of paper money: the US dollar, the euro or the yen will be different.

By virtue, the value of land, art and gold is inherent. Absolutely some liquidity is needed for day-to-day expenses, but there are no issuers in these physical holdings that could suddenly make your land disappear or turn your gold into confetti.

Tip № 2 – To protect the wealth of generations, DO NOT share it

Different individuals equate different investment ideas. Generally speaking, when mom and dad die, their property is divided between the children. When family assets are divided, each child has the right to do with their share as they please, but, too often the financial discipline of mom and dad is not a hereditary trait, and destiny usually changes.

If the assets remain intact and managed as if they were a company, families will view their wealth differently and may not hesitate to invest $ 5 million. Because assets are passed down through generations, each generation does not view assets as “their own,” but considers themselves guardians of something greater.

Tip № 3 – Educate attitudes towards “wealth” in the next generation

Once you have reached your wealth (or during its creation), talk to your children about how you did it; why did you do it; and what you want to do with it once you pass it on. Also, think about postponing the transfer of wealth for up to 30 years. This allows children to succeed on their own rather than feel right.

Conversations about wealth with their heirs (children) should often be met at the dinner table. It will also give you the opportunity to “evaluate” whether they are suitable for the continuation of your condition.

In today’s economy, you need to learn to create, build and protect your wealth. If done right, you can also get a wealth of generations for your family.


Neighborhood Investment Research


Your neighbor enjoys watching financial news, and sometimes he buys or sells a number of shares of a public company’s common stock. How does he do it?

He knows why he does this before planning how to do it. It seeks to invest in a growing company before too many other investors sort it out and raise the price of common stock. But he also likes to win at what he does, and this aspect of investing can go from plus to minus. “How” starts with getting relevant, relevant and effective investment information. Such information is provided by various free television and Internet resources.

Your neighbor records the morning and afternoon investment TV shows “CNBC.” After he comes home from work, spends time with his family and enjoys dinner with his family, he spends thirty minutes – an hour watching CNBC daytime shows to learn the investment news about the financial markets that day. It is possible that he will collect information about a specific company whose shares have increased or decreased according to the news. He searches the internet for the name of the company to find out its symbol.

He gains access to the “Big Charts” to learn about the company and its performance to date, as well as over a period of time, paying close attention to the size of the company and whether it pays quarterly dividends. By searching for shares, paired with the words “dividend payout schedule,” he may learn that the company will pay another dividend to shareholders who own the shares soon.

Your neighbor does not gamble. He invests money. Rarely will he invest in news stocks. Instead, according to research, he may decide to add this stock to his watch list to do a deeper analysis of what caused the stock to move up or down in the past. Over time, he has compiled a list of about 30 stocks, some in all ten sectors of the S&P 500. From the CNBC show, he learns which sectors are evolving today.

He trades stocks with a famous online broker who charges $ 6.50 for a trading commission. He trades only using the limited amount of money he has set aside for this purpose. He prefers to buy no more than 100 shares of any stock, and at times increases the purchase about a month before the ex-dividend date of the company when the volume increases in trading of that stock and he sees that the price has started to rise. He sets the purchase price as a “limit” order (because he doesn’t want to buy when the price is rapidly rising above his target price), and he supports that order by choosing “good to cancel”.

When breaking news changes settings, it cancels the purchase order. Selling is a big problem. After the purchase, should the stock price rise rapidly, tempted to sell it for a quick profit, but suppose the company’s business began to rise to a new core level (the shares to keep and pass on to grandchildren)? He pays more attention to the news on the stock before deciding what to do with their sale. When stocks fall on unexpected bad news, he usually sells without hesitation, as this can limit losses, and he can account for losses compared to earnings in other stocks for the tax year.

No. a qualified, licensed investment professional, your neighbor too it’s not you. Do research, limit risks and be careful about the investments that may go your way. Your neighbor never invests in what he doesn’t understand, and never listens to specific investment advice. # TAG1writer


Keep track of your total cost


Owners of business and professional practice know that they cannot effectively manage their company without understanding its financial position. Similarly, when it comes to drawing up a comprehensive wealth plan, they also need a basis for assessing their overall financial status.

“Balance of life”[1] provides a complete picture of the owner’s assets, liabilities and own value. Although similar to the more traditional balance sheet used to monitor their company, the Balance of Life includes both real and implicit assets and liabilities.

The left side of the sheet lists the owner’s assets and includes traditional financial assets (cash, stocks, bonds, alternative assets, etc.) and other tangible assets (real estate, precious metals, art collections, etc.). It also includes implied but expected assets.

Imitation assets are illiquid assets that are often not traded but have value. In a previous article, this was called “human capital”. Often human capital is often overlooked, but it reflects the present value of the owner’s expected return.

Liabilities located on the right side of the sheet should be treated equally. Mortgages, business loans and other property arrears are obvious obligations. In addition, business owners and practitioners should include their continuity goals, as liability is provided, and career professionals and non-business owners will include estimated retirement costs.

For example, if you want to maintain a certain standard of living after you leave your business or retire from a career, you create a certain responsibility that must be financed by assets located on the left side of the life balance. The desire to buy a holiday home, start another business, or fulfill a charitable commitment is also an implied commitment.

Think about the balance with the assets listed on the left and the liabilities on the right. Combined assets include home, retirement plans and family business. In total, they cost $ 2,000,000. To this we are going to add $ 800,000, the amount of money the owner expects to earn as business income. This increases the value of Total Assets to $ 2,800,000 /

In the Liabilities section, we list three common assets, including mortgages, college expenses, and estimated retirement expenses. In total, they amount to $ 1,800,000. This leaves $ 1,000,000 as discretionary wealth; an amount that a person can use at will, but it will affect their value, pension and even inheritance.

The use of a balance of life helps owners, professionals and others to place value (present value) on their implied assets (their projected income) as well as implying liabilities (retirement and other expenses). This information should compel owners to review all of their tangible and real assets, including the value of their business, to make sure they are on track to achieve their long-term goals.

[1] Wilcox, Jarrod, Jeffrey E. Horvitz and Dan diBartolomeo, 2006. Investment management for taxable private investors, Charlottesville, Virginia: CFA Institute Research Foundation.