Some people despair when they put together their financial balance sheet or net worth statement. Such a document basically lists the value of all of your financial assets (bank accounts, stocks, bonds, precious metals, real estate and so forth) minus your debts (mortgages, auto payments, credit cards, other loans, etc.). For many, this can be a shock as they discover only a small gap, or even a negative gap, between assets and liabilities. That’s where the “Life Balance Sheet” comes in.

If you are part of the fortunate group whose assets far exceed your liabilities, that’s terrific and you are prepared for a great life going forward (at least financially). You can easily manage your normal expenses and are prepared to pay for any expected or unexpected life transitions. You can also help family members, friends and others that are important to you. This can lead to a great feeling of freedom and independence!

However, regardless of the health of your financial balance sheet, there is another set of assets and liabilities that can be just as important. These assets are included on the Life Balance Sheet and it includes important items like:

  • Your family, both immediate and extended.
  • Your professional and personal networks.
  • Close friends and nice acquaintances.
  • Somewhere to live that is comfortable and secure.
  • Dependability of electricity, running water and the internet.
  • Your education, both formal and informal.
  • A particular set of skills and experiences that is different than any other person.
  • Access to great free public services like parks and libraries.
  • Personal attributes you possess like charm, intelligence, empathy and athletic ability.
  • Freedom of thought, religion, expression and movement.
  • The world wide web which gives you access to more information than even the richest and most powerful individuals experienced just a few decades ago.
  • The type of health care and diet that can keep you alive and vibrant into your 80’s, 90’s or perhaps beyond.
  • Clean water and clean air.

This is just a small list of potential non-financial assets to add to your personal life balance sheet. You can probably come up with many more things to be grateful for. And if you are fortunate to have one, your most important and valuable non-financial asset will probably be a loving and supportive spouse or partner. This is someone you would not trade for all your financial assets (let’s hope not anyway!). Actually, there are no doubt several things on your personal asset list that you would not trade money for (e.g. living in a free country).

Financial and non-financial security are important to a productive and happy retirement. You might enjoy an earlier article I wrote on how to achieve financial peace of mind.

For another perspective on the life balance sheet read the article from entrepreneur and wealth manager David S. Chang, Understand Your Personal Life Balance Sheet.


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