By Evelyn Jacks
How do you measure your wealth? There are three key financial documents available to help you do so. Are you using them to your advantage in understanding your money and it’s relationship to your life? Consider the following:
Three key financial documents are required to plan and measure your wealth management progress over time:
- The personal net worth statement, which is a snapshot of acquired wealth
- The tax return, which defines disposable income
- The financial plan, which enables future decision-making on an ongoing basis
Creation of these documents is one thing. . .it takes time to do them well and it takes time to understand and interpret them. Your professional advisors can help.
However, it is the management of decisions based on the results in these documents which is really helpful, especially if you want to make joint financial decisions over time, with your family members and your professional advisors.
This is important because your behavior around your money is as important as the performance of the money in the marketplace. In order to make wise choices about the use of their money over time, investors must use best practices to manage income and capital. Those best practices can be taught at school, in the family, or in the financial services. You need access to financial education and principles at various decision-points in your lifetime. Sometimes it’s worth paying for that, too.
In the end, what is needed is a strong focus on the stewardship of sustainable wealth according to your own plan for your family. Are you leading that process for your family and with your financial advisory team? Should you be?
Think about it. It’s Your Money. Your Life.
Evelyn Jacks is President of The Knowledge Bureau, a national educational institute focused on excellence in financial education, and a member of the federal Task Force on Financial Literacy. For information about self study courses and books visit www.knowledgebureau.com