What Do You Really Desire Financially
5 Things Business Owners Desire Financially
I believe that through knowledge and discipline,...
What is a financial love letter? In short, it is a document with all the business and personal financial information including logins, contact information, and amounts. My thought is that some or most of you just got very overwhelmed at the thought of putting this together.
Now before I completely lose you, here are 3 reasons you need one.
I realize this is a morbid thought that nobody likes to think about. But seriously, if something happened to you, would anyone know how to access all your financial information such as bank accounts, investments, insurance policies, and other assets? Yes, I am sure someone could eventually figure it out after a while, but wouldn’t it be easier if it was all in one place? In a business setting, someone should be aware of everything to keep the business running. In a personal setting, your spouse or a close friend or family member or even a financial advisor should be able to access this key information.
Net Worth is the true measure of your financial wealth. Is it increasing? Cash in the bank does not mean Net Worth is increasing. You could mortgage an asset or take out a loan and your cash increases but your Net Worth decreases. In both business and personal situations, list all your assets and liabilities to see your full financial picture. I encourage you to review your net worth on a quarterly or at least a half year basis to monitor if it is moving in the right direction. Have a 5, 10, and 20 year Net Worth goal. There is nothing wrong with looking at this. Don’t obsess over it, but monitor it. Check out a book called “The Millionaire Next Door“.
Most business owners eventually need to put together a personal financial statement for a line of credit or even to have a business credit card program with a decent credit line. Also, general liability, property, auto, and other commercial lines of insurance require a full accounting of your assets and market value.
I get it. I am a financial person and I realized just this week that I have not updated this document since December 2012. You can imagine how much had changed. Pretty much everything. It might take some time to get this together, but once you do, it is not difficult to update.
How much do you love those close to you? Put together this financial love letter, and make sure someone knows where to find it. Even if you don’t need it, you will truly understand your Net Worth and will have the information you need for a loan or for business insurance.
Do you have an idea for a business or product and want to know your Return on Investment? Check out the ROI Predictor to help you understand what is needed for success.
I believe that through knowledge and discipline,...
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