Cashflow and Compounding

What is a personal financial statement?

Personal financial statement and balance

Sometimes we have to get out of balance to appreciate how good it feels when our personal financial statements are in balance. Such an experience may give you the motivation to focus on creating and maintaining an appropriate financial balance today which enables you to achieve your short, medium and long term goals.  

If you are running at break-even or at a loss, it can be hard to turn things around. If this is the case, look at the different cashflow assets and liabilities you currently hold and find some ways to enhance your position.

Alternatively, you may be in a fantastic cashflow position, and the next few years provide an opportunity to put your cashflow to great use. Your personal financial statement can help you set goals and benchmarks, which can be used to assess how effective your actions and plans are in progressing you towards such goals.

To the right is a blank personal financial statement. In the next chapter we give you tips and ideas as to how to use your statement.