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What Financial Position Are You In?

Financial Statement & Measures

Everybody should be able to know what their financial position is at every month end. The rich always take stock of what they have and the financial position they are in to determine what tweaks need to happen to make sure all the income streams are working well and their money is safe. They talk in monthly terms.

They also take stock of how many months their wealth can survive alone if having to just pay expenses.

They have a clear indication of what their ROI (Return on Investment) is and what their tax position is, and knowledge that they have taken steps to protect it best they can.

•We are going to look at how to fill in our own financial statement every month and track our positions as we grow.

•We are also going to pin point our key team members that will help us on our journey ahead. Remember, we are not an expert in everything and others will have far superior knowledge and set of skills than what we have.

•We are going to make ourselves accountable to these key team members to keep ourselves on track.

The Financial Statement:

•Income – This is money coming in from all streams whether post tax or pretax.

•Expenses – These items are where we spend most of our money to keep our lifestyle going (i.e. Food, rent, clothes, magazines, etc).

•Assets – these are things you hold and they make you money as a return, the value of the held item can also appreciate. (i.e. Property, Stocks, Bonds, Businesses, Houses, etc)

•Liabilities – these are items that are still costing you - being paid for that may turn into assets after a certain threshold is met (i.e. Negative gearing property, business loan) or just cost money to keep and will remain a cost to have (i.e. boat, car, jet ski)

Other terms on the financial statement:

•NOI – Net operating profit, the net amount after Income minus Expenses

•ROI – Return on Investment, the percentage

•Capitalisation Rate / Yield - Annual NOI divided by Purchase Price

•Valuation Rate - Annual Income (gross turnover) divided by Capitalisation Rate

Your monthly budget:

Why is this important – We all need to see where any money received is being funnelled to.

•There could also be income that can be redirected to another income stream without much restriction to the normal spending habits.

•The flow of money

•We also need to see whether the income is pre-taxed or post-taxed dollars.


Income Received –

Bank Credit Interest –

Rent Investment Received –

Other –


Food –

Car –

Bills –

Telephone/Internet –

Leisure –

Investment Property Expenses

Rates –

Other –


Credit Cards –

Property Loans –

Education Loans –

Car Loan –

Other –


Rental Properties –

Stocks –

Managed Funds –

Bonds –

Superannuation –

Business Value -

The next step is find out where you are right now financially? Let's improve on that.

1.Go ahead and fill out the financial statement – be honest, be as correct as possible.

Each month, this will be a statement benchmark of how you are progressing on your path.

2. Ask yourself, is there an amount of money each week you would not miss to contribute to a savings plan? This can as small as $6 per week, better if more. (Check your statement to see how much you can set aside each week)

3. Open 3 bank accounts – internet accounts are probably better as they do not charge monthly fees, takes less time to transfer funds and can be linked to your main operating savings account. We are going to call each account TREASURE CHEST SAVINGS, TREASURE CHEST INVESTING, CONTRIBUTIONS. The plan is to set up an automatic saver scheduled to remove your nominated amount into each of these accounts weekly. I started mine with as little as $100 per week broken down into the 3 piggy bank accounts like this Savings $40, Investment $40 & Contribution $20. The idea of compounding interest on the money you never missed will grows on the side.

• Rules of the Treasure Chest accounts – The savings account can never be accessed – our growth fund, unless being utilised in cash term deposits. It shall always remain liquid. The Investment account can be used for the direct use of playing risk (i.e stocks, investments, managed funds, real estate, etc). The contributions account is as it suggests – the give away money to help others. We all know that when you share the wealth the wealth comes back to find you. You are more enriched by helping others over yourself and exposed to other like minded persons. You will find yourself radiating to new higher level people and causes. Also the tax deductible aspect is kind. Find your cause to aid.

Having the money away from your operating savings account will automatically start saving you money that normally you would see and spend.

In my experience, if I saw money in my account, I would settle my bills etc, just in case I could not pay for it later. But by doing this, I did not realise I was not paying myself to grow and instead my balance did not grow over time as I always found other items to pay down.

The key team members (in general)



•Loans Strategist


•Adviser (in which ever stream)


•Quantity Surveyor

•Insurance Broker

•Civil Engineer

•Town Planner

Online Business:

Website Host

Website Designer

Allied programs


Online Trading Adviser

The importance of structures.

In Australia, we have

•Sole Trader (individual)

•Partnership (joint)


•Trust – Hybrid

•Trust – Superannuation funds

•Trust - Discretionary

•Trust - Unit

The safest way to protect your assets is to place them in a trust. **Please talk to you Accountant to identify the best structure for your circumstances.

Do not put too many income streams in the one trust, instead have a few in one structure only.

Congratulations you have just completed the 1st step to securing your future successes.

Meg Hogan Business Coaching

Portfolio Mastery – wealth tips, ideals and opportunities Whitsundays, Queensland Australia

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