Financial literacy begins by understanding your personal financial statement
The reality is that money doesn’t make you rich. What does make you rich is your financial IQ. Give the same $100,000 to a person with a low financial IQ and a person with a high financial IQ and I guarantee you’ll see a vast difference in how that money is spent and grown.
Central to the difference between those with low and high financial IQs is a simple but profound literacy: the ability to understand a financial statement.
One of the most important things you need to know in order to be financially successful is to know how to read an income statement and balance sheet. But even more important is understanding the relationship between them.
Understanding the relationship between the income statement and the balance sheet as seen with our personal financial statement template allows you to quickly understand if an investment is an asset or a liability—and this understanding will allow you to make the right investment every time.
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