Have just read “Money Secrets of the Rich” by John Burley. He offers an interesting perspective on how you should view and maintain your finances – like a company maintains its finances. You should account for your assets, liabilities, income and where you spend your money. It should be monitored constantly so you always know your financial standing. If you don’t, how can you know whether your assets are growing or you are sinking into debt?
I thought this was worth sharing if you had never thought of your finances in this way. As a single person this is something I do every month and know my financial standing at all times – even more important for a family I would imagine. I see it as critical in monitoring and developing my performance as a private investor. It also gives you much greater focus.
I do that. But I am an accountant and raised looking at life from an assets and liabilities perspective.
Makes sense though.
Monitoring your property assets should be the same as if managing a share portfolio, perhaps not quite as regularly though.
This raises the question of “eroding capital and possibly negative equity”, something that did occur in the late 80’s ie post 87 crash.
As Steve put it you must ensure you have an exit strategy. Constant monitoring would allow timely exits or amendments.
It is good sense.
Jeff
Yes it’s an interesting point you make. Once you get into the mindset of running your life (not just your finances) as a business you tend to become alot more results focused. It makes a lot more sense, I thouroughly agree with your point.
Liz Wilson
Mortgage Lender
“Once you get into the mindset of running your life (not just your finances) as a business you tend to become a lot more results focused.”
Well put, Liz, that’s exactly what I was getting at. We can all tend to drift unless we get order in our lives to give us the focus to achieve things.
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