Time to put everything together for where you are today. Looking at this can sometimes be difficult! It’s the same reason why so many people hide their credit card bills and only pay the minimum out of sight can mean out of mind.
You might have already done some of this exercise as part of the Minimal Investor Course for Getting Your Account in Order. This will involve expanding on that a bit.
It’s the same mindset that lets very smart people invest with a financial advisor or other experts that chips away at your investments, sometimes costing you huge amounts.
When I ran the numbers on my own investments, moving from an advisor to a self-managed portfolio with the same return would have meant a 50% difference in the value of my portfolio after 30 years. 50%!!%#!! Taxes and fees are the nemeses of a portfolio. By cutting those out the amount you can save can add up.
This is the document you’ll be working out of for this activity. This document will serve two purposes:
- It’ll help keep track of all Minafi activities in one place.
- If and when you schedule a chat with me, which is free for anyone who bought the Minafi Investor Bootcamp, we can use this as a jumping-off point to get the most out of our discussion.
Family Snapshot
This should be the most straightforward section of the document. Fill in the few questions here and move on to the harder ones.
Finances
Fill out your income and spending for the year. If you’ve never before measured your yearly spending, that might be a tough one!
My recommendation is to use something like Mint or Personal Capital to track your spending for a few months. You’ll want to track this long enough to understand your seasonal spending – Christmas, travel, summers vs winters – that kind of thing.
We tend to spend a lot of money right around the end of the year, so if we only tracked our spending in December it’d look much much higher. Same for months where all of our hotel stays hit during a vacation. Track long enough to understand what your yearly spending estimate would be.
Your Accounts
List out every bank account, investing account, retirement account, health savings account and anywhere else where you have money. If you have long-term debt through credit cards, student loans or somewhere else, you could include those too. If you pay off your credit cards in full each month you can skip adding them.
Totals
The totals section has some quick calculations just for you. The “Financial Independence” numbers show how much you’d need to save to potentially never need to work again. I say potentially because it’s all based on past performance. The “Financial Independence 3%” number would be enough to never work again in 100% of known cases given a diversified portfolio.
Financial Goals
The last part is more of an essay section. In column B, add your answer to these questions with as much information as you want to give.
That’s it!
Once you’ve completed