The Statement of Financial Position

Jun 4, 2020 10:33:09 AM / by InvestorKeep

A personal statement of financial position is an outline of an individual’s financial position at a given point in time. It demonstrates your net worth: your assets minus your liabilities. The goal of the Statement of Financial Position is twofold; first to ensure your finances are invested in a way that will allow you to accomplish your goals (retirement, travel, education, etc.), and second, to ensure both your assets (investments) and your liabilities are being managed efficiently.

InvestorKeep uses this model to develop alerts and track your financial progress. We also  provide financial education alerts to help you better understand how your finances are being managed.

Assets: An asset is anything that has value. Investorkeep breaks down assets into five categories:
  • Life Use
  • Qualified Accounts
  • Non-Qualified Accounts
  • Education Accounts
  • Real Estate

InvestorKeep tracks your assets to ensure you are paying appropriate fees, have appropriate risk levels, and are achieving the highest possible performance.

Liabilities: A liability is something you owe to someone else.
  • Credit Card
  • Student Loan
  • Line of Credit
  • Mortgage
  • Auto Loan

InvestorKeep tracks your liabilities to ensure you are not paying excessive fees or interest rates. Debt is not always bad, but it should always be efficient.

Net Worth: Assets minus Liabilities.

Tracking your Net Worth allows you to see how efficiently you are growing your wealth and more importantly, if you are on schedule to accomplish your financial goals. Net worth varies from year to year, what is important is that it remains in line with the goals you set. Your SOFP should be reviewed with your financial advisor on an annual basis. If you haven’t already setup an appointment to do so today.

 

 

InvestorKeep

Written by InvestorKeep

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