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The Ultimate Financial Plan: Balancing Your Money and Life by Tim Maurer, Jim Stovall

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CHAPTER 3

The Gift of Discipline

HOUSEHOLD CASH FLOW

Pretend for a moment that your personal life is actually a business. The board of directors is getting together to review your stewardship of the company’s finances. Would they be pleased with your performance as the company’s chief financial officer? For many of us, if we conducted our occupational endeavors the way we manage our household finances, we’d be fired!

Ultimate Advice

“The Gift of Work” sets the tone early in The Ultimate Gift that a life of purpose is not necessarily a life free from seemingly mundane disciplines, or, as Red Stevens put it, “a simple, four-letter word: work.”

Personal Financial Statements

I encourage you to manage your household finances as though you are a business, and that management centers around three financial statements that are just as effective when used to manage You, Inc. as they are in Fortune 500 companies.

The three Personal Financial Statements are:

1. Cash Flow Statement

2. Balance Sheet

3. Budget

An easy way to remember these is to view them as representing the past, present, and future. Your cash flow statement represents your financial past; the balance sheet, your financial present; and the budget, your financial future. Many confuse these three statements or assume that the single statement they use is sufficient. But without all three statements working in conjunction, the value of any one of them is reduced to almost nothing.

Timeless Truth

Cash, time, fitness, and ...

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