When was the last time someone actually asked you for your college grades as it relates to getting something you want, like a promotion? It’s probably been a while. So, in this video, I’m going to talk to you about your personal financial statement, something they’ll probably ask you about a lot more frequently coming up.

Hey there, it’s Billy with KeePon Cashflow. I’m here once again to share some more tips and strategies that will help you make more money. They’re also going to help you have more control over your free time and ultimately live with less stress. If it’s your first time here, why don’t you go ahead and subscribe to the channel? You’ll also want to make sure you check out the links as well as the comments at the end of the video because every week the comments get better and better. The links are also getting more and more exciting!

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I want to come back to this question of what exactly is a personal financial statement., I was thinking about when I finished my college degree and got my job. A lot of times people were asking me where I went to school, Or what my grades looked like.. Then I realized that once I had my first job, nobody ever asked me about where I went to college or what my grades were. They were always asking me about how much money I made and how much money I was spending. So I took a long time to figure that out and said, wow, nobody really cares about where I went to college anymore.

This whole concept became crystal clear to me when I started playing a game called Cashflow 101. Now, this game did something for me that was pretty amazing. I know I’ve talked about it in other videos, and if you want to check that out, you can check it out here. But I want to come back to the essence of this whole game, which is about understanding your personal financial statement. It talks about it in the game, but it really comes down to having a clear understanding of four key principles. I’ll talk you through each one of these core principles. The first one is income, and when you think about income, you have to ask what it is.

Income is the money you are generating. When you get started, it’s your job, right? Your job is the amount of money you have coming into your family. You may  get this from exchanging time for dollars directly, like when you are working in a retail store, or you may be someone who is in high complex B to B sales, like what I do during the day, where you’re getting paid a commission. You also have a flat fee, but you’re exchanging time for dollars. You may also have other types of income. You may be doing some investing, like buying stocks low and selling high, which is creating more income for yourself. I know I keep talking about this over and over, but I love passive income, which is the kind of income where your money’s actually going out and working for you, creating money for you, month after month.

So that is the first part of your personal financial statement, looking at the amount of income that’s actually coming in the door. The other side of the equation is what’s going out the door, right? I always think about the things that happen in my day to day life. You may be paying rent or you may be paying a mortgage or you may be paying both. You may also have the different things you’re paying every single day. You’d have to pay for the lights and you have to pay for the water.

Utilities put those all together. If you also like to eat, you probably have to buy food. You may have a credit card. All of the things that are constantly causing money to go out the door to help you maintain your life or your lifestyle are expenses. In your personal financial statement, you’re looking at how much money is actually coming in and then how much money is going out. And at the end of every month you have the amount of money that’s leftover. Hopefully you have money that’s left over every month that you’re able to use to invest in other things.

This is all if you’re looking out over a period of time. If you want to look at a specific day and time, you have two other things you look at for your personal financial statement.

The first is different assets. When you’re looking at assets, I like to think about what Robert Kiyosaki says. These are the things that are actually putting money in your pocket. On the other side, you have liabilities, which are things taking money out of your pocket. If you look at the assets side of the equation, you have things like cash. You can use that money to create more money. You may have things like stocks or bonds, the paper type of assets that you can actually use to invest in things that can create money for you. Then as you become less liquid, you have other things like gold and silver or property. Rental properties are close to my heart, especially multifamily rental properties. You also have things like businesses. All of those are assets that can create revenue for you.

Then on the other side of that equation, you have the liabilities. This is the fourth, and the last one we’ll talk about. The liabilities are anything that takes money out of your pocket. I’m just going to use two examples here. One is any time you take out your credit card to buy whatever. For example, the clothes that you buy are not generating any more money for you. The other thing is the home loan for a home you actually live in. You’ve taken a loan on something that doesn’t actually create any revenue for you month after month.

You may get lucky in the future and that could create some revenue, but month after month when you pay the mortgage, it’s actually taking more money out of your pocket as long as you’re living on that property.

So, those are the four things in a personal financial statement. It’s very similar to what big companies do or small companies do, right? They look at four things. They look at how much money’s coming in every month, how much money is going out every month, and then the assets you have that are generating money for you, and the liabilities that are actually taking money out of your pocket. When you look at all of those four things together, it helps you understand how financially sound you are.

Maybe there is some more work you need to do so you can get in the right place to continue to invest and move yourself closer to your goal. Because, once again, what we’re here to do, what I want to share with you, is to help you understand how to make more money, how to have more control of your free time, and how to ultimately live with less stress.

I’m always interested in understanding what you think about these videos, how helpful they’ve been to you, and how familiar you are with the concept of the personal financial statement. I’d love for you to leave your comments at the end, and for those of you interested, I know I talk a lot about the fact that I work and live in Europe while investing in multifamily properties in the United States. Because of that, I’ve actually taken some time to write an eBook for you. You can click the link here in the video or you can just go ahead and type in keeponcashflow.com/roadmap.

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Thanks so much. Looking forward to seeing your comments. Everyone, this is Billy Keels with KeePon Cashflow, and as always hasta la próxima!

You can also check out my latest podcasts and collaborations here keeponcashflow.com/podcasts/