Investing 101: Building Individual Financial Wealth – Part 1

I have heard so may quotes about the past and future but 2 are quite “interesting” to me and they are related to Michael J. Fox and P. J. Parish. I said interesting because it goes against my basic understanding of financial management and somehow they are quoted as saying it’s not worth it or discouraging people from reviewing their past – this is what someone said to me when quoting these sayings!

Well, there is this saying translated from my native tongue – Igbo:

“A person who doesn’t know where the rain started to beat him or her should not expect to know when it will stop beating him or her”

What this means is you have to pay attention to your past as it actually influences your present as your present influences your future.

This said, I referred to my financial management understanding earlier because of what we do broadly. We look into the past performance of a company or individual (even though this does not give an indication of the future) to make decisions in the today (present) that will affect the future of our clients investment(s), or personal finance

In this series, we will be looking at 3 key way(s) companies review or show their books (or financial states) to their investors. The purpose of this exercise is to bring us to a position where we know what it is that we have currently and how we can build on this to increase both our financial acumen as well as our financial wealth. In this case, we will be our own investors however if you are married with or without children or have other dependants, these will consist our investors or shareholders as they will benefit with our successes.

The series will be divided into 5 parts. Part 1 which we have here is an introduction. In Part 2, we will be delving into the financial statements of companies with special emphasis on the cash flow statement and the balance sheets. Part 3 will deal with the statement of cash flows and how it will benefit us in planning our financial future and Part 4 will be looking at the importance of the balance sheet and how we can build our personal balance sheets. Part 5 will be looking at bringing everything together.

Happy reading…

Your Investment Analyst.

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