This is part of a weekly series on personal finance and wealth building.  If you care to read the first one, click here.

The first step of the trip from where you are now to where you want to be is understanding how to tell where you are.  For wealth, that’s a Balance Sheet.  You also need to know how that’s changing over time, which is where you need the Income Statement.

Many financial ‘experts’ poorly or incorrectly explain the balance sheet, assets, liabilities, income, and expenses.   I’ve seen one go as far as to suggest your house isn’t an asset (and then suggest a good way to get rich is to invest in real estate).  While I’m not presenting a lesson in Finance, these are pretty much the same tools you would learn to use in a Finance 101 class. Continue reading