A Useful and Necessary Exercise
A Useful and Necessary Exercise
In Your Money or Your Life by Vicki Robin and Joe Dominguez, they make you do an exercise. It is the first of nine. It goes like this:
“A. Find out how much money you have earned in your lifetime-the sum total of your gross income, from the first penny you ever earned to your most recent paycheck.
B. Find out you net worth by creating a personal balance sheet of assets and liabilities.”
When I read the book, I decided to try to diligently do it. After a few weeks of getting all my tax documents and trying to think through, as much as I could, all the odd jobs I had that I was paid for, I finally had a number. I’m not going to share it. I have never made a lot of money in my life, something I am working on changing, but when I added up the 13 years of money that I made working and then looked at my net worth, it was painful. I had some money saved, no assets and thankfully no liabilities.
Like me, I think more people are in this place in the United States than we care to admit. Unlike me though, and this is no smear, only an observation, most Americans have large liabilities, which I didn’t, thankfully, in credit card debt, mortgages and car loans.
When I discovered Becoming Your Own Banker, it was a few years before I read Your Money or Your Life. It was a recommendation from Chris at Life, Success and Legacy after one of our coaching sessions as I learned more about how to implement IBC in my life. After reading the book, it gave me clarity about how great IBC truly is and can be to any that might implement it.
The great difficulty for all of us is that most of our money that we work hard to earn ends up flowing out of our hands to loan institutions. These institutions make a lot of money from this and we do not. It doesn’t have to be this way. You can keep more of your hard earned money through using the infinite banking concept.
I encourage you to do the exercise above and add up all the money that you have earned over your lifetime. Then calculate your net worth. It might be painful or it might not. Either way, it’s good to be clear on this since having this starting point makes you begin to think about your money and how much you are keeping. The next step though I would like to add is, and it may be hard to do, if you have an amortization table for the loan then that will be helpful, calculate how much money you have paid in interest to a bank, or a car loan, or perhaps in credit card debt. Once you have that number, ask yourself, how different would my circumstances and life look like if I had all that money I paid in interest still in my control? Routing the interest payments you are paying to others back to yourself is at the heart of the infinite banking concept and it can make a great difference for your life.
PS- If you try this exercise, please let me know. Also read the book, Becoming Your Own Banker and Your Money or Your Life. I would enjoy talking with you about either one. Please send me an email at doreanibc@gmail.com. Then we could schedule a time to talk.