-- Posted Monday, 7 May 2007 | Digg This Article
While watching a baseball game with my father-in-law during his convalescence we listened to the announcer quote all the stats of the player coming up at bat. The announcer knew everything about this player. This started me to thinking. How much time do we spend on our own financial statistics? I read somewhere that most people spend more time planning their yearly vacation than they spend on their financial planning. How can we keep track of our finances without a scorecard? While one of my brothers (who shall remain nameless) is fairly wealthy, he does not ever bother to balance his checkbook. I simply can not understand this quirk he has developed. What I am talking about today, however, is a little more involved – but only a little. I am talking about a simple personal financial statement.
Before your eyes glaze over and visions of your accountant crunching numbers clouds your imagination – it is not that hard to compile yourself. As a matter of fact I have provided a link to a simple excel spreadsheet on my website for your use at http://silvertrading.net/rich_text.html. Most of these numbers are easily obtainable. Some may be a little difficult at first but once you have done it the first time it is much easier to update. You should run a personal financial statement at least once a year to check up on your financial health. Especially at this time of year – right after Uncle Sam has finished picking your pocket on April 15th and close to taxpayer independence day in May. You may be feeling a little poor right now and have a need to count up your financial blessings. When you have worked your way to the bottom of the financial statement you will have your net worth.
Balance is important in all things in life, especially with finances. Try to make sure your net worth is divided up in all 7 investment classes (stocks, bonds, cash, real estate, commodities, precious metals and collectables). Effective diversification can protect your wealth during the economic ups and downs that are as sure to come as night and day. Only you can decide how to divide up your net worth in these investment classes but remember that old saying, “Invest 10% of your net worth in precious metals and hope it doesn’t work”. That 10% is your insurance against the failure of all the others. No one should buy fire insurance because they are planning on a fiery disaster….. but everyone should buy it just in case it does happen through no fault of your own. While there is a time for a larger stake in different investment classes at different times in an economic cycle or even at different times in your life you should always have a little financial insurance – just in case.
What are you waiting for? Get started now and calculate your financial stats. And while you are at it, work on that diversification in your assets. Turn off the television and get to work – don’t worry, you won’t miss much.
He who loses money, loses much,
He who loses a friend, loses much more
He who loses faith, loses all.
Larry LaBorde,
Silver Trading Company
Larry and Puddy (his wife of 29 years) live in the occupied South along with their two semi-grown children and Deacon the wonder dog. Larry manages the family drilling business and also sells precious metals at Silver Trading Company. www.silvertrading.net
Send questions, comments, corrections or threats to Llaborde@silvertrading.net
-- Posted Monday, 7 May 2007 | Digg This Article
