Friday, March 14, 2014

How to check financial health by yourself

The financial check up usually is done by financial advisers. They interview you to gain the financial condition. They can appraise whether you are in health or sick after they analyze some factors. Actually, you can also check your financial health by your self. You should recognize the financial fact. Here some financial fact that you should know and it helps you check your financial fact:

See the net worth
The net worth is representative of wealth and it describe your health too. If you have so much asset relative to liability, you must be health and wealth. The asset that you have include car, land, building, investment, saving and others.  Undoubtedly. The asset can pay yourself. It can make money too. You can hire the assets to make money or buy the assets again.

Check the Cash flow
Check the cash inflow and the cash outflow from you. You may have so much asset but you may get it from credit or lease. It must be dangerous if you use much debt to buy asset. If your most asset are funded from debt, you must be in dangerous. 
Have you enough cash to fulfil your daily necessity?

Credit Score
How high is your credit scores? Higher, the better. You can borrow your money from other sides. The credit scores reflects the financial health. The higher score means you can pay off the debt on time. We can get the score from FICO.

How much investment do you have today? The investment could be a sign of the financial health. The investment is also asset of the person. It may increase or decrease, depending on market condition.

When the market bear, the value of asset decrease. On the other hand, the value will increase when the market bull.  The investment can also generate money. The stock usually pays dividend every years.
Do you have retirement fund? The retirement fund is important for the future. We can calculate the retirement fund too. The amount should be enough for your future.

Estate Planning
Have you something to protect your house. The insurance may protect your house.

Debt is the liabilities that we should pay it, such, as mortgage loan, credit, lease car, credit card, and others. The high debt means you are in danger. The ratio of debt to asset is not more than 30%. If you have more than 30%, you can bankrupt. You should reduce the debt immediatley.

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