A company’s financial statements indicate the amount of resources (assets) it has at its disposal and also any claims against those precious resources at a particular point in time, the difference between the two is the company’s Net Worth.

Claims upon the company’s assets can also be referred as liabilities or equities. So, a company can be known as a combination of economic resources and equities.

Regardless of what structure your business takes (sole trader, partnership or corporation), every company or business has two different types of equities. They are creditor liabilities and owner’s equity.

The main way to communicate information on how a business is performing financially, to those who have an interest in the business, is through financial statements. However, care must be taken when interpreting these as no set of financial statements is perfect and all have their flaws, the main one being they represent the position of an enterprise at a given point in time and may not reflect major changes in the financial position since that time.

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The good news is that there are nearly an unlimited number of ways and strategies to be successful in investing and managing your money. The bad news is that there is an unlimited number of people, businesses, advertisements, magazines, radio experts, and television shows all ready to tell you what they think you should do. But don’t despair. Among the many successful ways are some common denominators that all seem to revolve around common sense. Here are my top ten common sense tips for asset management:

Tip #1: Don’t fall in love with a stock.

Don’t let emotions get involved with your stock — it could cost you dearly. Regardless of any sentimental meaning you may attach to it, it represents a commodity of value only.

Tip #2: Don’t buy or sell from a broker on the last two days of a calendar month.

If you don’t know your commission-based broker well, put a moratorium on any business during the last few days of any month, when such brokers typically end their production period that determines their paycheck for the following month. Don’t risk getting recommendations based more on your broker’s need to earn a commission than on your need to make money.

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All of us have an unlimited number of alternatives to which we can allocate our finances. We have things we would like to do, ministries to which we would like to give, and items we would like to buy, all of which cost money. The problem that the vast majority of us share is that we have a limited amount of financial resources to meet our financial desires. This creates the necessity of using our resources as efficiently as possible. For that, we need a plan.

Step #1: Set Goals

The first step in developing any plan is to set goals. Determine what it is that you want to accomplish. This defines the reason for the very existence of the plan itself. Financial goals should be reasonable, and, very importantly, they should be measurable. If goals are not stated in measurable terms, then they are vague, and it will be difficult to know when they have been accomplished.

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