Calculating percentage change is a key skill in general, but very important to personal finance. Investment returns. Budget comparisons and adjustments. Salary Analysis. Expenses analysis. All of these areas of finance require the understanding of this calculation. It’s a simple calculation, but indispensable. I use it regularly as a metric in my Balance Sheet and Income … [Read more...] about Basic Math: Percent Change
The Monthly Family Meeting
One of the best ways to make sure a process works well is to set it up so you don’t have to think about it. There were certain things that I felt we needed to do at regular intervals. These varied by the specific tasks. For instance, I don’t need to review my will every month, But I do need to update and review my budget, Balance sheet and income statements every … [Read more...] about The Monthly Family Meeting
Basic Math: The Median
The median is the middle number in a sorted list of numbers. In other words, it is the value that separates the higher half from the lower half in a data sample, population or probability distribution. The benefit of median, particularly versus another type of average such as a mean, is that the median is not skewed by a small number of extremely large or small values. In … [Read more...] about Basic Math: The Median
Personal Finance Habits and Process
I believe that systems beat goals and habits beat checklists. In order to incorporate personal finance consistently into my process, I’ve used a few techniques. One of those is to turn the activities into habits. The other is to tack those onto already existing habits I already perform regularly. … [Read more...] about Personal Finance Habits and Process
Eight Income Streams of Wealth Generation
The IRS breaks income into three types - earned, portfolio and passive. However, that is too simplistic for our purposes. If broken down not based on IRS qualifications, but by how the income is derived from the perspective of your activity to generate it, we have 7 types of income. Earned Income | You are a Worker … [Read more...] about Eight Income Streams of Wealth Generation
Basic Math: Trim Mean Average
A trimmed mean is a system of averaging numbers where a certain percentage of the smallest and largest values are excluded prior to calculating the average. In other words, averaging a set of numbers but excluding the “outliers”. Trimmed means are a way to smooth out data by minimizing the impact of outlier data points. Trimmed means are sometimes also referred to as truncated … [Read more...] about Basic Math: Trim Mean Average
Financial Planning Continuous Improvement
In my opinion, personal finance isn’t something that you do for a few weeks, months or years until you’re financially well off – and then stop. To be truly successful at building wealth, it needs to become a lifestyle. Something you just do. Like breathing. … [Read more...] about Financial Planning Continuous Improvement
Eleven Elementary Rules of Personal Finance
I like principles. I like rules. I don't always follow them, mind you! And I certainly know when to purposely break them, in order to get where I need to be, or do what I need to do. However, I like getting knowledge that has been 'tested' out by people who came before me. Knowledge transferred saves me having to learn lessons the hard way. … [Read more...] about Eleven Elementary Rules of Personal Finance
Basic Math: Geometric Mean Average
The geometric mean is the average of a set of numbers by using the product of their values, as opposed to using the sum, as in the arithmetic mean. The value of this method of calculating average can be seen commonly when calculating the performance of an investment or portfolio. … [Read more...] about Basic Math: Geometric Mean Average
Seven Stages of Wealth Building
One of the biggest problems I had when I was first starting my personal finance journey was figuring out what were 'reasonable' targets. I wanted a more definitive set of targets to strive for that also had a basis in real changes to one’s quality of life, stage of living, wealth position, etc. I wanted these targets to be... … [Read more...] about Seven Stages of Wealth Building
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