Simple Wealth Steps Tip#1 – Know Where You Are

With one third of the year gone I am guessing most of us have drifted somewhat away from our 2013 goals or if we didn’t set any goals, we’re not really getting the financial experience we ‘hoped’ for.

I’ve decided it’s a great time to inject a bit of momentum back into your 2013 financial goals so over the next 30 days or so I am publishing an 11 part mini series titled ‘Eleven Simple Wealth Steps’.

Each instalment will contain a short message featuring one of the 11 steps which I have taken straight from my Simple Wealth Steps course. I believe they will give you a great basis for creating what I would call a wealthy life journey.

If you have done the course previously this will be a great opportunity for you to revisit and refresh. If you have not done it it is a great opportunity to get some fr`ee tips and an insight into what it is all about.

No time like the present to start!

 

Today is Step 1; Know Where You Are!

One thing I know is this. Every time I get involved in helping someone sort out their finances, the very first thing we have to do is find out what the current situation is; i.e. how good or how bad is the current situation.

I want to know:-

What do they own? – Assets What do they owe? – Liabilities What is coming in? – Income

What is going out? – Expenses

If you are not aware of your current financial position certainly within maybe 5% then you are probably missing opportunities.

I have a list of all my assets and liabilities and I know what my regular and long term expenses cost me each week. I know what I am putting money away for and why. I work on making my income exceed my expenses and I know what my overall net worth is.

Why is this so important?

Let me explain it this way, I remember being lost in a city I had been visiting for just a few days. I had become familiar with just a few land-marks and major arterial roads and felt confident that I could basically find my way around. I went out in my car on this particular evening and on the way back to my hotel I realised I did not recognise my surroundings.

Not to be phased by this minor inconvenience I started back-tracking my steps to find where I had gone wrong. Unfortunately in the dark I must have managed to miss some turns and after something like 30 minutes I had to admit I was totally lost.

I knew where I wanted to go, but that was of no use at all to me until I could establish where I was!

Luckily for me I eventually recognised a landmark and in an instant I knew where I was and was able to make the trip back to my hotel. I could join the dots between where I was and where I wanted to go.

Before I knew where I was I had been going around in circles; after I knew where I was it was easy to plan the drive straight to my destination!

So, I would encourage you to sit down and take the time to work out your current financial position and update it whenever something changes. Do this at least a few times each year.

I don’t walk around consciously reciting numbers in my head but the important figures are at my finger tips whenever I need them. This allows me to very quickly and easily consider any opportunities that come my way. That keeps me excited and motivated.

 

That’s all for today. Have a goody!