Bennett Financial Services

Knowing your current financial position will convince you to make the necessary changes to achieving financial independence.  This process is best conducted in written form; thus, some time to complete the following steps.  Construct a statement of your family net worth.  This should include a detailed listing of your assets and your liabilities. The statement should list the location, type and balances of your various bank accounts and securities accounts.  Moreover, it should include an articulation of your non-investment assets plus your investment portfolio and retirement assets.  Using the information of your statement of net worth, calculate the asset mix ratio of your invested assets. 

In addition, you should construct an accurate cash-flow statement for the last three months that would include a listing of all of your sources of income and each of your expenditures.  Income minus expenditures will determine the amount of savings that you are generating each month.  Once you have done this you will immediately see areas where you can improve your spending patterns and produce savings for investment.

The statement should also include an analysis of the income taxes that each of the family members is paying including their marginal tax rates.

This statement should include the steps that you have taken to regarding estate planning such as when you last revised your will and the type and amount of insurance that you have. 

List the contact information of the various professionals that you are dealing with including your bank advisor, lawyer, accountant, insurance agent, securities advisor and real estate agent.

When you compare your current financial position to your goals and objectives, you will see the correct direction for you to move in achieving financial independence.         

To obtain a step by step check list procedure of assessing your current financial position including convenient templates of Statements of Net Worth, and Cash-Flow Statements,  read the chapter on ‘Current Financial Position’ in Bennett Financial’s ‘Checklist Guide to Financial Independence’.  To get a copy, click here.