Format for printing

To put us on track to provide a good income throughout our retired life, we must determine our current financial status. To do this, we need to complete a set of financial statements like those found in your seminar workbook (pages 6-8) -- the Net Worth and Cash Flow Statements.

Note that we've provided the worksheets in two versions: one for those Excel-lent Fools and another on printable pages in Chapter 2 of your seminar workbook. If you know the basics of Excel, we suggest you use this set of worksheets simply because you'll be able to save your data on your computer, enter in formulas, and play with the numbers a little more easily. You can download the Net Worth and Cash Flow Statements now or by clicking on the Downloads link to the right at any time, from any page in the seminar.

If you happen to use Quicken or Microsoft Money (or any other personal finance tool), you probably have all the data you need right there. If you don't have any of these programs (Excel, Quicken, or Microsoft Money), don't worry, you can input your numbers into your workbook by hand and print out multiple copies of the statements to refine your numbers (or use a pencil!). Note: For the digitally inclined, Quicken offers some excellent budgeting tools. You will still have to go through your past expenses, but if you enter them in a Quicken register, the program will do a budget for you. It's pretty cool.

The Net Worth and Cash Flow Statements may look complicated, but they're really not. You can skip past most of the line item entries -- they're there simply to provide a comprehensive listing, and to remind you of the typical details found in personal financial statements. They help ensure you don't omit anything as you examine your financial life. (Yes, every latte counts!)

Net Worth Statement
Let's take a closer look at the Net Worth Statement (a separate browser will open so you can look at the Net Worth Statement and keep reading). This statement tells you where you stand financially as of today. You see a listing of assets, then a listing of liabilities (or, money owed to others), and then the difference between these two.

It gives the starting point for retirement planning by highlighting the opening balances of all available retirement investment assets. (And, just as an aside, it is one of the first documents you will be asked to produce by any financial or legal expert you may eventually need to use. If you haven't done so, the advisor will prepare one for you, but at his or her rate, which could cost you hundreds of dollars.)

You should now set about making your personal entries based on your records (remember the checkbook register or bank statements you gathered?). The worksheets may take you an hour or so to complete. It's time well spent. Once completed, these documents will provide virtually all the source data you'll need. If you are missing information, you can estimate based on your past expenses as you remember them (remember we said estimate, not lie).

« Running The Numbers

Predicting The Future »