Preparation Harbour
Time to take stock for the financial journey ahead
We’ve got a disorganized crew, our ship has been battered by storms and we don’t know what provisions we have. There are leaks we need to plug before we can begin our financial journey. Our gold stocks are low and we owe a substantial amount to our investors and the crown.
Before we set sail we need to look at where we are now and where we want to be…
The Destination
Before we take stock of our situation we need to think about what we need for our journey. By doing so we can look at our current situation with an eye to leveraging what we have
The destination is a very personal one and it will be different for everyone. The ultimate destination is financial freedom. This website will get you to that jumping off point. When we remove the anxiety that comes from money problems, we open up possibilities and choices that were previously unavailable.
To be clear, money doesn’t solve all problems. It is a means to an end. It is a tool to be used and if used correctly can leverage up our life in ways like no other commodity.
The goal for our purposes is to use the skills and knowledge we already have, add some new information, habits, perspectives and tools that will put us on the right heading. It won’t be easy, there will be setbacks and dangerous waters to navigate. The goal of your treasure compass is to help navigate safely through. Let’s look at where we are and what we can work with.
Taking Stock of our situation
2. Taking Stock
It would be impossible when appealing to a wide section of the population to cater to everyone personally. If you require personalized advice then I would suggest a licensed personal financial advisor who will be able to create a plan suited to your specific needs. Having said that, there is no reason we can’t still provide an overarching framework that you can modify to suiit
It can be surprising how similar the problems of a low-income household can be to a high income household when it comes to managing money. Equally true is how dissimilar an elderly widower’s relationship to money can be, compared to a young family for example. The risk tolerance is different but there can still be common strategies that will be used by both.
What we will do here is be general enough to cater to a large group yet specific enough that you will be able to tease out what best works for you.
It all starts with taking stock. By that I mean looking at where we are right now as we prepare to take off in our creaking old hulk of a ship. We need to look at our assets and our liabilities. It doesn’t just mean what we own and what we owe, it is far more interesting and nuanced.
For arguments sake let’s assume we have two identical houses; one we live in and one we rent out – lucky us! Evenb though they’re exactly the same, one of those houses is an asset and one is a liability. What, how can that be? Well one of them puts money IN your pocket and one takes it OUT of your pocket. Ask anyone with a mortgage how much money their family home puts into their pocket. ZERO. It may increase in value over time (not guaranteed by the way) but even then you’ve still got to live somewhere. And if you calculate your mortgage interest repayments into the mix it’s even more pronounced.
What will do is make a list and it may look something like this…