PHASE I: Organize Finances
This is the minimum you should do.
Know where you are before you plan where you’re going.
Step 1: Organize Your Financial Records
Financial independence is a destination. Like any journey, the route starts with your current location. The process of organizing your financial records is crucial. You can’t make proper decisions if you mistakenly think you’re further from your destination than you thought.
Step 02: Track Your Spending
Knowing & tracking what you eat spend money on is the first step to controlling your diet expenses.
Step 03: Create a Balance Sheet to track your Net Worth
You should be treating your finances the same way a business does. And one of the first documents every successful business uses to track it’s health is a balance sheet.
Step 04: Create an Income Statement to track cash flow
If a net worth is the location, your income of “cash flow” statement is the speed you’re traveling. This is the second number you should be tracking.
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