the success of the entire journey. This is an opportunity to find truth and authenticity with respect to your money and your being, and it’s an essential part of equipping yourself appropriately for the road ahead.
The Truth Will Set You Free
While it sounds like an old cliché, this well-known principle is rich with wisdom. Embracing truth is an opportunity to explore all areas of your life. Taking an 16 Inspired Wealth: Financial Leadership for the 21st Century in-depth look at your present existing financial circumstances helps you identify potential roadblocks and reduce the risks that are predicable and avoidable. You will benefit by clarifying where your personal and financial foundation can be strengthened to increase the likelihood of achieving your goals. Once you gather the data and clarify the truth about your circumstances you will be free to act with greater confidence.
When we ignore what we know is true, the cost is often more than we can afford.
Remember Enron?
Here is a famous example of what not facing the truth about money can lead to. At Enron it became obvious that their business model did not produce the earnings results that were expected. But because top executives didn’t want to face the truth about their company’s earnings they continued working with a broken model. They hid the truth and the deception compounded. Had the leaders recognized the truth early enough and understood how disaster multiplies from not telling the truth, they could have made the changes and the shifts required. This is where leadership was needed, and was sorely lacking. What did hiding the truth cost the executives at Enron?
The Truth about Your Assets and Liabilities
Let’s begin by taking a closer look at your current situation. Below is an exercise that will help you shed some light on the state of your financial foundation and on your whole being. We call this the Inspired Balance Sheet. It’s a tool that expands on an integral part of financial planning: the balance sheet, also known as the net worth statement. In helping you create sustainable wealth, our approach is to include your whole life because we want you to succeed in all aspects of your life, so there are categories here you won’t find anywhere else. The nonfinancial assets and liabilities are the other energies in your life and the values that give your life meaning.
The following is an example with sample nonfinancial assets and liabilities filled in - yours may be different. Please list your own nonfinancial assets and liabilities in your journal using this format. Then begin monitoring your whole Inspired Balance Sheet.
Quantitative vs. Non-Quantitative Assets and Liabilities
In the financial context assets refer to all of your property, financial investments, and other financial resources. These are generally things that are easily measured (quantitative). We look at an investment statement and we instantly know the value of our holdings. However, in addition to our quantitative assets we also have many non-quantitative assets. These assets cannot be measured in a traditional way, but they can be extremely valuable. In the course of your lifetime, your non-quantitative assets are essential elements that determine your ability to create and maintain real wealth.
“For everything you have missed, you have gained something else.”
— Ralph Waldo Emerson
Liabilities, on the other hand, are your financial obligations or debts: they include mortgages, car loans, personal loans, credit card balances, and deferred income taxes. Our concept of liabilities should be expanded to also include: our fears, our limiting beliefs, behaviors which are inconsistent with our goals, etc. These are all liabilities, which tend to limit our ability to create and maintain lasting wealth.
The Inspired Balance Sheet is a Tool to
Help You Live a Balanced Life
Often we tend to focus so hard on what we don’t have that we miss out on what we do have. You can choose to stop doing this to yourself. You can live your life more fully and more honestly by taking a look at all that you DO have in your life. There is no sense in lamenting over the road not taken. Where you have been was essential to get you to where you are today. And where you are today is the platform from which you will launch tomorrow. Be grateful for all that you have and all that you are NOW and choose to use your gifts in a meaningful way to create the life you want.
If you look beneath the surface of the negative events that have occurred in your life, you will often find that there were benefits to your having been through them. What have you learned from your struggles? How have they made you stronger? You can turn negative experiences into assets by embracing the lessons they teach you.
“When one door closes, another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us.”
— Alexander Graham Bell
In assessing how you are using your money, what matters most is that you are using your resources to continually increase your financial and nonfinancial assets and decrease your liabilities. What we’d like you to see clearly is that there is more to wealth than just the financial dimension. One of the most interesting lessons about money is that people often sacrifice so much in acquiring it, that once they have the money they feel a sense of emptiness. Only then do they realize the value of what they had given up for money. One of the greatest challenges that many financially successful people face today is to find meaning in their lives. They feel fortunate but not fulfilled.
In This Way Sometimes More is Less, and Sometimes Winning is Losing
Janice:
I can attest to this one! I had a full life, a busy and fulfilling practice, a great relationship with my husband, a growing and inquisitive son, professional recognition sitting on several boards and involved with decision makers in my profession. I had the great building blocks in place. Financially, we had covered all our bases, and were beginning to create a wealth plan. Yet I kept waking up asking if this was all there was. Was the making of money and accumulating “stuff” all there was to life? It was at this point that I began to ask the questions about what brought me value.
Through asking myself stronger questions, I began to change the “successful practice.” We decided to have more children, to change my hours so that I had more time with the family. I brought in a wonderful associate to mentor, who would eventually purchase my practice. I had more creativity in my life, more fulfillment and satisfaction, and I also began to open up to new projects and ideas. These opportunities in turn have developed into new sources of energy, money and fulfillment.
Take a look at the list of nonfinancial assets on your Inspired Balance Sheet and reflect on how precious all of these things are. You can expand how you think about wealth by simply including these in your definition of assets. Not only does this make you feel rich, it also is a better indicator of your personal potential.
When you look at your nonfinancial liabilities, understand that energy drains take away from your wealth. Just as the nonfinancial assets are more precious than money, the nonfinancial liabilities can be more problematic than your financial liabilities.
The Family Balance Sheet:
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