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While watching a baseball game, with my father-in-law
during his convalescence, we listened to the announcer quote all the stats of
the player coming up to bat. The announcer knew everything about this
player. This started me to thinking... How much time do we spend
on our own financial statistics? I read somewhere that most people
spend more time planning their yearly vacation than they spend on their
financial planning. How can we keep track of our finances without a
scorecard?
While one of my brothers (who shall remain nameless) is
fairly wealthy, he does not ever bother to balance his checkbook. I
simply cannot understand this quirk he has developed.
What I am talking about today, however, is a little more involved - but only
a little. I am talking about a simple personal financial statement.
Before your eyes glaze over and visions of your accountant crunching numbers
clouds your imagination - it is not that hard to compile yourself. As a
matter of fact, I have provided an example of one below. Most of these
numbers are easily obtainable. Some may be a little difficult at first,
but once you have done it for the first time, it is much easier to
update. You should run a personal financial statement, at least
once a year, to check on your financial health. Especially, at this
time of the year - right after Uncle Sam has finished picking your pocket on
April 15th, and close to "Taxpayer Independence Day" in
May.
You may be feeling a little poor right now and have a need to count up your
financial blessings. When you have worked your way to the bottom of the
financial statement, you will have your net worth. Balance is
important in all things in life, especially with finances. Try to make
sure your net worth is divided up in all seven investment classes (stocks,
bonds, cash, real estate, commodities, precious metals and
collectibles). Effective diversification can protect your wealth
during the economic ups and downs that are as sure to come as night and
day.
Only you can decide how to divide up your net worth in these investment
classes, but remember that old saying, "Invest 10% of your net worth
in precious metals and hope it doesn't work." That 10% is your
insurance against the failure of all the others. No one should buy fire
insurance because they are planning on a fiery disaster, but everyone should
buy it just in case it does happen, through no fault of your own. While
there is a time for a larger stake in different investment classes, at
different times in an economic cycle, or even at different times in your
life, you should always have a little financial insurance - just in
case.
What are you waiting for? Get started now and calculate your financial
stats. And while you are at it, work on that diversification of your
assets. Turn off the television and get to work - don't worry, you
won't miss much.
He who loses money, loses
much,
He who loses a friend, loses
much more
He who loses faith, loses
all.
Larry Laborde
Silver Trading
Company
www.silvertrading.net
Larry lives in the occupied South with his wife Puddy and sells
precious metals at the Silver Trading Company. Larry can be contacted
at llabord@aol.com. You can view
his web site at www.silvertrading.net.
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