The balance sheet is a very important financial tool I recommend everyone use. It’s a great way to measure your financial progress at a moment in time. It captures what you own (assets) and what you owe (liabilities) and produces your net worth.
Before meeting my wife, I updated my balance sheet every quarter. I started doing it because I used to obsess over reading these articles about the world’s wealthiest people. They would always report that such and such was worth x amount of billions or millions of dollars. So, I began computing my net worth to see how I progressed.
While we were dating, I figured letting her know about this balance sheet thing I was doing every three months made sense. This way, once we got married, it wouldn’t be uncomfortable for us to discuss our financial status. Fast forward a few years, and my wife and I have continued to update our balance sheets every quarter.
Then, we decided to have a kid. And this kid turned out to be a little girl. This little girl would be setup for financial greatness shortly after she was born. If you still need to read my piece called 18-year head start, you should check it out.
As of this writing, my daughter is a little over one year old and has a considerable amount of assets. Of course, she has no liabilities and probably won’t have them for at least another two decades. So, let me say that again. My daughter will grow her asset base for twenty years and has no debt. Could you please do this for your kid(s)?
Then it hit me! My daughter will have thousands of dollars in assets and no debt until she can purchase her first home. And her assets will have grown so that even when she takes out a mortgage for her home, she may still have a positive net worth. That’s crazy, right???? I thought so, too! And when I started thinking about this, I got excited.
I wanted to memorialize this since she’s young so I can look back when she’s older to see how things turn out. My wife added the cherry on top when she said this…”We are raising a baby that might always be in the Black.”
The #BuildWealth Movement™ works tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.