Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results. – Warren Buffet

What is a Personal Financial Statement

A personal financial statement is a spreadsheet that details the assets and liabilities of an individual, couple, or business at a specific point in time. Typically, the spreadsheet consists of two columns, with assets listed on the left and liabilities on the right.

Why is a personal financial statement useful?
This statement is a tool that can be used to analyze your current financial status, enabling you to track net worth and set financial goals. These statements are often reviewed by lenders when a client applies for credit or a loan, including a mortgage.

What are assets and liabilities?
Assets are investments and property of significant value that can be used as collateral to secure a loan. While salary and other forms of income are not listed as assets, lenders will typically ask to see them, listed separately, to gain a better understanding of your ability to manage liabilities. Common assets include:
Account balances: savings, certificates, money market accounts
Investment balances: stocks, ETFs, mutual funds, bonds, annuities, cash-surrender values of life insurance, commodities
Retirement accounts: 401(k)s, IRAs
Real estate
Valuable personal property: vehicles, boats, jewelry, or collectables
Liabilities are accounts that carry a balance to be paid down by regular installments. Monthly accrued expenses (utilities, cable, cell phone, insurance payments, rent, food, and other general living expenses) are excluded. Common liabilities, however, do include balances for:
Credit cards
Student loans
Unpaid medical bills or unpaid taxes
Mortgages or vehicle loans
Loans that you have co-signed

How is net worth calculated?
It’s calculated by simply subtracting total liabilities from total assets. The difference is your net worth. If you need help calculating it yourself, our Money Management tool in Online Banking and the Mobile App can help you calculate your net worth when you add all of your accounts!

What if you have a negative net worth?
Whether your net worth is positive or negative, it is a starting point. It tells you where your finances currently stand and provides motivation for goal-setting. The worst action you can take is adjusting your numbers to better your net score. Intentionally modifying amounts on an official personal financial statement is punishable by large fines and/or imprisonment.

Your personal financial statement is like a photo, but your net worth is like a movie.
While a personal financial statement is a static snapshot of your net worth at a specific moment in time, net worth is constantly in motion as investment balances, interest rates, and property values fluctuate and liabilities are reduced.

Culled from Clearview dot com

Every person who invests in well-selected real estate in a growing section of a prosperous community adopts the surest and safest method of becoming independent, for real estate is the basis of wealth. – Theodore Roosevelt