A journey of a thousand miles may begin with one step, but chances are that you won't know the direction to go unless you first know where you are standing. In much the same way, creating a wealth-building plan should start with a look the assets you have now.
This may be something that you would just as soon avoid. Maybe you'd rather not think about the money you know you should have saved, but didn't, or about some of your investments that haven't turned out as planned. And even if you are satisfied with your saving and investment performance, looking to the future certainly seems more fruitful than dwelling on the past.
While any plan to maximize your wealth will focus primarily on the future, you can't completely ignore your financial past. Even if you don't have to make major adjustments in how you handle your personal finances, you'll need to have an accurate picture of what your finances are now, if for no other reason than to gauge how much more money you'll need to meet your various financial goals.
So, how do you answer the question: "What do I have now?"
We suggest that you follow our three-step process:
- Create an organized inventory of your assets and liabilities
- Build a current budget of income and expenses
- Identify and organize the documents and arrangements that will affect the creation of a plan to build personal wealth and pass it along to your heirs.