You're not the breadwinner, but why can't you save much money? How does a month end up with no spare money to invest? 

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The COVID-19 pandemic and the rising prices in the past two years hit the majority of us badly, but we often hear on TV that the business owners are worth billions! There are people who are rich and still single, just waiting for the love of their lives to appear. 

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I'm sure you've wondered why. What are your assets? How can you improve your earning power? These are good questions to start improving your personal finances.

We’ve created a tool to help you understand your assets. Filling out a personal balance sheet will help you understand your current situation.

Fill out the form truthfully, and you’ll be able to clearly understand your own assets much better.

This table contains some key sections. Each of the two sections focuses on five important pieces of information. This sheet incorporates part of your cash flow statement, and you can also review your asset position at the same time.

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You can view the balance sheet in the chart below.

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5 Key Information in your Personal Balance Sheet

1. What is the total monthly income pool? 

In the table, Alan Chan's salary of USD 2000 plus USD 100 of investment income is USD 2100/month.

Take time to review other ways to increase your income.

Tip: Learn new skills. Taking on part-time jobs such as those of a writer, lecturer, etc. to increase your income.

2. What is the total amount of your monthly expenses?

In the table, Alan Chan's total expenses are USD2010/month

List your personal expenses and see if there are any other similar items in the example.

Tip: Do your best to avoid any unnecessary expenses!

3. Is the monthly income minus expenses a positive cash flow or a negative cash flow?

Alan Chan's monthly income of USD 2100/month minus his expenses of USD 2010/month is USD 90/month.

Although it's a positive cash flow, there’s still a huge opportunity to improve the remaining amount after expenses.

Tip: You can set the positive cash flow to increase by 10% every three months so that you can increase your income and reduce your expenses!

4. How much money can I save each year? How do I plan for the extra money saved?

How much can you spare each month, and what are the options you’re looking into for investing the money you’ve set aside?

Tip: You can plan to invest USD90 per month in relatively stable investment tools!

5. What are your "value" and "total assets" when you subtract your liabilities from your assets?

Alan Chan's assets of USD25,000 minus liabilities of USD10,000 is USD15,000

Total assets of USD15,000 is Alan Chan's total assets and value

Tip: The higher the value, the higher the amount of leverage. You can set the amount of value you want to increase each year as a financial improvement plan for the next year!

Go through each section of the personal balance sheet regularly and analyze your current status.

Now that you’ve identified where you stand, how do you further enhance your assets and earning power?

Let's take a look at the transformation of our hero, Alan Chan, after implementing this method for one year.

In the next article, we will share 5 more advanced methods. Watch out for the next part of how you can improve your earning power.

Get access to a FREE masterclass now to take your investing to the next level!

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