Monday, December 4, 2017

Bringing Accountancy To Life

I know that we are all finance geeks when it comes to life hence it may be easier to look at it the philosophical way when it comes to it.

Life on the other hand is a bit more fragile and often people questions the existence of decision that has an impact in our lives.

This is the Balance Sheet of Your Life.



The day you were born is the day you IPO-ed yourself to the public. While you may own the majority of ownership in yourself, often we are shaped by how the public would view and vote for us. There would be decisions that you would have to depend on others to make for you and you just have to accept it regardless of the decision.

The day you die is the day you get delisted from the public offering of the stock market. The goal here is to accumulate ownership (experience) from the day you were born to the day you leave the earth. There are ample time to do that, so make the buyback counts.

Your ideas are considered an asset while your bad habits will become your liabilities. What goes in is a debit to your assets and what comes out is a credit to your liabilities. Your character will shape out over time due to experiences accumulated, so over time it is clear if you become an asset cow company or one with net debts when you die.

You will get plenty of noise everyday in your life. These are the temptations that will increase your liabilities over time if they are handled improperly. But by now I assume you already know that.

Your happiness and sorrows are your Profit and Loss. They tend to be more volatile than your balance sheet as our emotions undergoes a steer of emotions everyday and are tested vigorously each time they meet a situation. Over time, as you accumulate more happiness, part of it will be retained and go back to your assets, ensuring you live a "rich" life while you are still alive.

Your knowledge is an investment to your assets. They build up over time and compound to such levels that it will raise a bar level to your own game.

Love is your dividend while children are your bonus-issue. They do not change the fundamental and foundation of your life but they have a tremendous impact to strengthen it.

Your age is your depreciation. Time waits for no one regardless you are working, sleeping, accumulating experience or just drunk wasted in the back alley of your bar. Everyone gets depreciated on a straight line basis across a new standard GAAP of between 70-90 years. No exception.

Every year, it is important that you engage an auditor, preferably the big 4 auditor firm, to look at your financial statement. They are slightly more expensive but they can give you an open and critical feedback on how you can improve. These are your friends and families.

If you are a little frugal in nature and want to reduce these expenses, the new IFRS standard allows that you be your own internal auditor and we trust that you would be compliant to the standard through proper self reflection.

You are your own management to your life.

You have control on how you would like to lead or shape them, and to go beyond to influence the people around you.

A good company gets recognized over time from the public and the share price would eventually follows the performance.

A good life gives you the edge.

Now, start building up your balance sheet the proper way.


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10 comments:

  1. Well said!

    Building relationships increase your goodwill, which is intangible but add bring significant emotional and potential economic value to your life.

    Managing your cash flow in the form of retained earnings, to boost your capital gain.

    Providing the occasional dividend to those whom have shared ownership of your life make it more fufiling.

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    Replies
    1. Hi INTJ

      Wow thats an excellent addition to the narrative, definitely something which we need to learn and appreciate the good things in our life by sharing.

      Delete
  2. This comment has been removed by the author.

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  3. I like this essay using life as an IPO. very well written.

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  4. Hi B,

    Wow wow wow! This is a very interesting read and one of the best reads I've came across this year. I'm trying to figure out my balance sheet!

    ReplyDelete
    Replies
    1. Hi Sleepydevil

      Thank you for your kind comment.

      Indeed once in a while we need to look at positive lenses and clean up our own balance sheet :)

      Delete
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