Businesses use financial statements to see their performance and make key decisions going forward.

So, why shouldn't we?

Here is how Robert Kiyosaki's book Cash Flow Quadrant changed the way I think about money for ever.

What makes up my personal financial statements?

Your financial statements are made up of:

• Assets, things that generate you income in your sleep.

• Liabilities, things that generate expenses in your sleep.

• Income, money in.

• Expenses, money out.

Simple enough. See the graphic for a great visual representation of this.

How do I know what is what?

Think carefully about where things land on your personal financial statements.

Make sure you know what is what. For example, if you are a homeowner ask yourself if your home is an asset or liability. Common knowledge says "I own it! It's an asset!". But in reality you are an asset in the banks financial statements and your house is your liability. After all, your house is an expense machine:

• Mortgage

• Real estate taxes

• Insurance

• Utilities

• Maintenance

It's okay to want to own a house. But keep in mind what it actually is.

Building wealth is a game, just like Monopoly.

The game is simple, keep the asset and income side higher than the expenses and liability side.

The player who wins monopoly is usually the one who has the most properties or assets which generate them the most income. If your expenses and liabilities exceed your income and assets, you are headed for trouble if you don't right the ship.

It's a simple game but it's not easy!

Start making money decisions keeping your personal financial statements in mind. Over time, you will start to see the asset and income parts grow and the liability and expense parts decline. And with that you are on your way to building wealth.