One of the financial statements you will run into most likely several times during your career is a balance sheet. The balance sheet reports three things: Assets, Liabilities, and Stockholders’ equity. The ‘basic accounting equation’ essentially governs the whole sheet.

Assets = Liabilities + Stockholders’ equity

Any alterations from the data and we are just looking at an algebra equation. If liabilities go down, then either assets has to go down or stockholders’ equity has to go up. That’s where the statement gets the name ‘Balance Sheet.’

It’s also important to notice that a balance sheet is for a point in time. It’s often called a snapshot of a company’s financial standing. Which is a good way to think of it. You can see where money is at, where it is owned, and where it is owed.

You will have two main sections in your balance sheet. The Assets for the first, and the Liabilities and Stockholders’ equity for the second. Both of these two pieces will equal each other or the SEC and stockholders will get upset at the company and it’s poor accounting.

Now Let’s take a look at the first section, Assets. Assets are defined as anything that your company owns that is worth money. (Notice this isn’t the same definition you will find in Rich Dad Poor Dad!) They are organized from their proximity to cash. Cash comes first, then the asset that is most easily converted to cash. Accounts receivable (people or businesses who owe your company money) are generally next in line, followed by supplies, and then property that you own.

In the next section we see two subsections Liabilities and Stockholders’ Equity.

The money that your company owes to others is called your liabilities. The liabilities are generally put into order by the time period in which they expect to be paid. Everything to be paid within the year are first from highest amount to lowest. Followed by those that will be paid in more than one year, once again from highest to lowest.

We come to the Stockholder’s Equity next. This is the book value of the company’s stock, and not the market’s idea of it’s value. (Which might be a good way to help pick out undervalued stocks if you can find them.)

Let’s take a look at a mockup of a ballance sheet.

You can see that both sides ballance at 200,000 Gazillion Planet Aridni Dollars. The header gives the important information about the type of information and puts it into context. Next, there is the information!

How often do you find yourself wandering to your computer to login to your e-mail? Do you walk by the computer, only to stop and check to see if anyone’s written? You’re curious, and it’ll only take a second.

The problem, of course, is that you and I open that e-mail account far too often. E-mail isn’t an urgent form of communication, so why are we willing to drop everything else to use it over and over? Nothing communicated to you by e-mail is a life or death situation. So how do we curb this addiction?

You have to break the pattern:

1. Make a schedule.
Being curious isn’t reason enough to check your e-mail. I’m willing to bet that an easy 30 minutes a day is lost to curiosity, which usually results in a fairly empty inbox. Decide how many times you’ll check your inbox. Be as strict with yourself as you need to be.

Check a specific number of times each day. When you’ve reached your limit, you’re done.
Open your account on a specific schedule like once in the morning, at lunch, and after work.

2. Limit the number of e-mail addresses that you use
Every time you check your mail, you’re spending twice as much time as you check multiple addresses. I used two addresses and cannot check one without checking the other. By combining the two, my wasted curiosity instantly decreased by 50%.

3. Replace e-mail checking with purpose
Remember that every minute matters. E-mail is abused because it’s easy. We all feel a sense of victory after something is achieved; e-mail is the fasted way to cross things off of our list.

It doesn’t always work. Architects and construction companies cannot communicate the fine details of a drawing over e-mails. They’ll be back and forth for hours without achievement. You and I grew up on instant messengers; we know how efficient these programs make our communication. Online chatting has made me a faster typer… but at the cost of how much time? I can still talk on the phone faster than I can type an e-mail.

Do you ever crawl into bed, thinking of all of the things you should have done during the day? Had you not checked that darn e-mail so much, could you have crossed off something on that list?

4. Define that purpose
When you’re away from a computer, do you think of checking your e-mail? No–only when the computer is nearby. Many weekends, I don’t check my e-mail because I simply don’t have access. So far, I have never opened my e-mail program to find something important that required my immediate attention. During the week, I don’t have anything needing immediate attention, yet I keep checking anyway.

When you do have access to the computer, focus on things that matter more in the long run: passive income, net worth… family. It’s easy to keep walking when you have something that is more pressing on your mind.

You don’t check your post office mailbox over and over, so this week, try to reduce the temporary victories you get in checking e-mail.

Yeah, some people will get mad when you don’t respond immediately. Let those people know that urgent communication with you cannot be addressed in this manner. Tell them to do what your mother does–pick up the phone and call you.

1. A degree doesn’t mean you deserve the job

The unfortunate truth is that while you were busting you butt to learn anthropology, science, and statistics, many of your peers were getting jobs. A degree will help land you the interview. But a few years of work experience will probably land the other guy the job.

The textbook rules I learned in my human resources course are nothing like the procedures of most businesses. In fact, most businesses don’t have written procedures. School is nothing like the working world. No one at work revolves around you. In fact, you’ll find that success means you have to revolve around them (and it’ll drive you crazy!).

Your job won’t be glamorous.

My poor cousin dreamed of saving dolphins and marine life, so she went into environmental engineering. She was hired by a huge engineering firm that specializes in treatment plants. Can you imagine being the low man on that totem pole? Talk about the s_its! All she wanted to do was save animals.

But just because she earned the degree doesn’t mean she–or you–is entitled to a corner office with a huge salary, a month of vacation, or an amazing retirement plan. Work hard, and you’ll eventually earn those positions. The problem is that most of us college grads walk in with a sense of entitlement. Some day my cousin might be able to land her dream position, and you will, too. Just know that no one will hand that opportunity to you on a silver plate.

How many people do you know that are getting degrees at the same time as you? How many people are getting degrees at your school this year? Now how many new college grads are there entering this country’s workforce along with you?

You’ve got to prove why your lack of work experience makes you better than (a) everyone who didn’t go to college and (b) everyone else who did go to college. Why should an employer pull your name from the hat?

For me, the edge came from one thing: my senate internship in Washington D.C.. Know your edge over the competition, and push it.

The experiences have to set you apart. Working at summer camp is a blast, but if you’re not going seeking a profession with children, you’ve got to reach a point of saying goodbye to summer camp. Do internships, make contacts, and try different things. What makes you stand above the line of other applicants?

2. Make it a job you love

Many people develop a professional skill set by accident. Art students run pet shops. Women’s studies majors become construction management experts. I think it’s pretty hard for anyone to know exactly where he/she is going to end up. And the people who know from age twelve that becoming a doctor is the perfect profession often find themselves hating their work. After all, a 12-year-old chose their career.

So now you’re walking from that stage with a diploma. Where do you go? My dad always told me,
Katie, make sure your first job is one of two things: something that interests the heck out of ya or something that provides the stepping stones for the career direction that you want to pursue.

I didn’t take his advice, of course. My first job looked like a dream to most people with some great perks–four days a week, flexible hours, discounted international travel… The job didn’t strike me as fascinating, and it certainly had nothing to do with my self-vision twenty years from now. But I pushed to land the job. I nailed all three interviews and won the job over 300 other candidates. I felt so proud… I also felt so miserable.

You have to find a job that you love… or at least like enough to give your best. A full time job is nothing like school or a summer job. Every day for eight hours a day is a lot. It wears you out. And your boss isn’t going to let you leave early to go camping with your buddies.

Don’t pick a job because it’s secure, because you’re parents think it’s great, or because you’re afraid you won’t find another job. You’ll hate getting up. You’ll hate working. And worse of all, you’ll ruin your spirit. You won’t want to do anything but mope during the evening.

3. Make a million dollar money plan

The worse part of life after graduation is all of the bills. You can’t stay on your parents’ insurance, student loans have to be paid, and you’ve got expenses like garbage pickup that you didn’t even know existed. Your friends will be trading in their cars, buying new furniture and houses, eating out more, and spending gobs of money. Live as frugally as you can. And remember this:

if you want to make a million dollars, you have to put in a million dollars worth of work

Life is only going to get more expense as you grow older, so you need to have a plan. Do you want to work six years or 60? Most people chose to work sixty, relatively easy and relaxed years. They’ll patiently work for vacation days and save until they can retire.
You, however, are reading Aridni, which leads me to believe that you’re willing to work like crazy for six years. You’ll give up your weekends, evenings out, and most free time today. You’ll probably collapse into bed most nights. But isn’t it better than 60 slow years? When I work weekends on my own projects, I often want to quit because I feel so tired. Then I think, “If I want to make a million dollars, I have to put in…”

You don’t need to update your net worth every month. But if you really want out of that rat race soon (and believe me, once you enter that race, you’ll probably want to leap out as soon as you can), figure out what money means to you. What do you want money for? Who do you want money for? And what do you want with your time?

4. Think about today.

My last tip is something that I try to ask myself every day:

What can I do better tomorrow to reach my goals that I learned from today?

As you develop your business, the need for financial information and tracking will grow.
Where is your money coming from?
Where is your money going?
What areas are the most profitable, and what are losing the most money?

A sole proprietor or partnership needs to take this into consideration in order to make sure they are being as effective as possible. Corporations and other businesses need to be aware of their situation at all times as well.

This is where accounting comes along. The basic financial statements that you should be aware of are:

• Balance Sheet – This Statement shows the breakdown of what your business owns (The Assets) and what it owes (The Liabilities) for a specific point in time.
• Income Statement – This Statement will show how your business performed over a period of time. Your revenues and expenses for the time are displayed here.
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