Breaking out your net worth into short-term vs. long-term components You can break out assets and liabilities into short term/liquid and long term/non-liquid. This allows you to differentiate between assets that could be accessed quickly and without penalty (market or regulation) and those longer-term assets where we would pay a price penalty to convert them to cash … [Read more...] about Net Worth Components
Basic Math: Arithmetic Mean Average
This calculation, outside of simple addition and subtraction, is likely to be the most used math function in all of your personal finance activities. Almost all that we do is averaging our money, returns and expenses, and then comparing them to various targets. These include things like the S&P 500 or Nasdaq or inflation – which are themselves – averages! … [Read more...] about Basic Math: Arithmetic Mean Average
Personal Finance Math: The Math that’s Actually Useful and Fun!
For most Americans, math class seems less than useful. Trust me though, math is very useful. You just have to know how to use it to make money! Whether we are talking about how long it’s going to take you to pay off a debt or how to figure out how much an investment is going to make by the time you’re ready to buy that Maserati – math is a requirement. Not Revenge of the … [Read more...] about Personal Finance Math: The Math that’s Actually Useful and Fun!
How to Calculate your Net Worth
Wealth and Net Worth, for all intents and purposes, are synonymous. In personal finance, it is the single most important metric to track. It is the yardstick by which we measure our progress. … [Read more...] about How to Calculate your Net Worth
Personal Finance in 100 Words
Part of the reason I’ve taken on this project is to try and distill the seemingly endless amount of information available on this topic into the essential as distinguished from the non-essential. To select the advice that is fundamental and indispensable to wealth creation and then expound on that information to develop a repeatable path applicable to anyone. … [Read more...] about Personal Finance in 100 Words
The Time Value of Money
A dollar is not necessarily a dollar. Especially when we’re talking about that dollar over the course of time. In general, money now is better than money laterIf money later, has to be more money than money now … [Read more...] about The Time Value of Money
When I decided I would never be poor again
How childhood experience determined my future During my childhood, my family was generally either upper lower class or lower middle class. How do I define that? Well, I was never homeless. I always had a bed to sleep, I have never had to share a bed. Though I did have to share a room with my sister when I was in second and third grade. I never went to bed hungry a day in my … [Read more...] about When I decided I would never be poor again
The Blueprint – Overview
If I was forced to provide you a one sheeter with the most important things you needed to know to manage your finances, I think this would be it. Follow these 20 steps, broken up into 6 distinct phases, and you'll be OK. … [Read more...] about The Blueprint – Overview
Step 20: Review and adjust all steps regularly (for the rest of your life)
These steps are meant to be taken as a cyclical process, to be continuously evaluated, refined, adjusted and repeated. The previous 19 steps i've outlined are not meant to be done just once. This 20 step process is not a 'set it and forget it' procedure. It's designed as an iterative3 process. It's designed to be done, multiple time, over multiple years, as you move through … [Read more...] about Step 20: Review and adjust all steps regularly (for the rest of your life)
Step 19: Create key Estate Planning documents
Given all the hard work we put into building our wealth, you really need to ensure your wealth is transferred to those you wish, in the manner you wish, with as little cost as possible. Use these documents. You may begin with standard templates from books, websites or other sources. But use a lawyer to finalize these important documents. … [Read more...] about Step 19: Create key Estate Planning documents
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