| TAKING STOCK OF OUR FINANCIAL GOALS AND ACHIEVEMENTS |
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Quote of the Week: “You must be good at one of two things, Planting in the spring or begging in the fall.” Jim Rohn. It is either 7 weeks, or 50 days… That’s how much time we have left to send off the year. 2011 has been a year full of financial blows. The weakening of the Kenya shilling, the inflation rate suddenly leaping from single-digit to double-digit, striking workers , a return to sky-high interest rates, just to mention a few. Indeed, we have had a lot to complain about as a nation. However, let us not forget that every cloud does have a silver lining. Tough times bring with them opportunities to learn, harden ourselves and strive to come out better than we ever were. Surviving during tough economic times is easier said than done, and only too often, we focus on the toughness of the situation that we end up forgetting to be thankful for the milestones we may have accomplished. In the seemingly-distant start of the year, many of us were excited with the prospect of forming year resolutions. It was a time that represented a new beginning. 11 months later, it is evaluation time. Looking back, what plans had you made at the start of the year, and how would you rate yourself in terms of their achievement, or otherwise? Put simply, there is need to assess where we are today (economically speaking; assets, liabilities, revenues and expenses), where we are going, and what is more important now. Just like in business, assessing your financial plans and achievements will help you realize what needs to be done in order to achieve the goals we set for ourselves. Personal financial statements act as a great assessment tool for our finances. Used correctly, they tend to reveal one’s financial position, measure one’s progress, and maintain all information about one’s cash inflows and outflows. One important financial statement in this exercise is a personal net worth statement also known as a personal balance sheet. When reviewing our personal financial goals and achievements, the ability to visualize and assess a summary of assets and liabilities that one has at a particular time enables you to see, in a nut-shell, what all your efforts to build yourself financially have resulted to. Generating a personal net-worth statement would entail listing the value of all your assets and liabilities. Your net worth is the difference between total assets and total liabilities, and it provides a measurement of your current financial position. It is important to note that your net worth is the amount you would have if all assets were sold for the listed values and all debts were paid in full. Remember also that your net worth is not money available for use but an indication of your financial position on a given date. To be able to use your net worth statement for the purpose of evaluating your achievements, it would be necessary to have a reference point-which should preferably be a statement of your financial position at the beginning of the year. Reviewing your net worth statement should ideally be an ongoing process that happens from the start of your goal pursuit, during, and right at the end. It should serve as a constant feedback loop on the effectiveness of your actions and their implications toward the outcome. This will give you clarity on your performance thus far and prevent surprises at the end of pursuing a goal. A net-worth statement is just one amongst many tools that can be used to review your financial achievements. Of more importance here are the key things to look out for during your review which should include: 1. your progress thus far 2. the things that have helped you achieve your goals 3. those that have derailed you from the same 4. A genuine list of the goals you have accomplished Being very rigorous and detailed in your “troubleshooting” process is very important. The importance of performing a review of your financial plans before the year ends is that it will give you a chance to iron out all the issues visible until you are sure your plan is robust and conforms to your best understanding of what is needed to achieve your financial goals; a strategic way to position yourself for the new year and change your actions where need arises in preparation for the coming year. As we prepare to send off the year and set new goals and resolutions for the coming year, do not forget to recognise your achievements, evaluate your failures and formulate a plan to strengthen the foundation of an even better tomorrow. As tough as the year may have been, lessons have been learnt, and new survival skills have been added; and that is the silver lining in the cloud of tough financial times. Make a decision to review your achievements today, and strive to be as honest as possible to yourself and you will be surprised at the insights this exercise will give you. You can send your comments or questions to This e-mail address is being protected from spambots. You need JavaScript enabled to view it , or visit our offices at Ecobank towers, 7th floor, Muindi Mbingu street. You can also follow us on our facebook page- Zimele Asset Management ( Kenya) View Older Weekly Updates
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