Personal balance sheet

It is in the nature of human kind to progress. Man is forever looking to challenges involving discoveries and inventions. If this quest to find more wasn’t existent as a major ingredient of human enquiry, we would not have had discoverers like Christopher Columbus, Vasco-de Gama, the Venetian father & son duo, Ferdinand Magellan and scientists like Newton, Einstein, Madam Curie, etc.

So, progress is the underlying objective of all endeavors. The word 'progress' must firstly be understood in its entirety and not just the dictionary meaning of headway, onward movement, etc. Progress relates to a continual cultivation of the human mind towards gaining new ground, to increase, expand, shape improve , mature and evolve, the horizons of existing knowledge base. It is the continuation of blossoming of the the new and dynamic thought process. The human mind cannot ever be in fetters. It is free and independent, intrinsically and naturally.

The human desire and spirit to have a unique avant-garde sense of judgment, which is founded upon the edifice of being innovatory, revolutionary, trend setting, trial blazing and progressive, pushes each of us to do better, or alternatively progress from one point of enquiry to another,… It has no destination but a part of continuum of the human quest.

At the very base level of progress at work place, we cannot loose sight of this basic mental makeup, which is a divine blessing bestowed equally upon each of us. How we put to use (application) the unique blessing (sources) will determine our personal balance sheet. The personal balance sheet is not majorly different from a corporate’s balance sheet; the only exception being that giving a numerical value to any asset or liability item, that in nature is of qualitative characteristic, could be a daunting challenge.

Similar to an organization/entity, the personal balance sheet has to be prepared on a daily basis. The only difference would relate to how each trait, opportunity, threat or strength is classified on the balance sheet.

Since the balance sheet has to be balanced; you being the auditor certifying the state of condition, as being 'true and correct' of the balance sheet, have to 'decide' where do you book, the difference on the assets side or liability. Personal qualities are part of your 'capita'; the obvious question arises, is it a liability or asset? Capital, in strict accounting sense is 'money owned' to shareholders/stakeholders. Hence on the personal balance sheet too, the stake holder is 'you'; hence at no time should your capital account have a debit balance!

In the preparation of the personal balance sheet, for qualitative resources, develop a rating scale, with a numeric value and assign a dollar value to each numeric. For the quantitative, you take the actual balances; plot and match the two, the differential is either a capital or a loss (negative capital balance).

In the journey of one’s career, it is expected that at the time of running off your 'day’s end process' you would remain in surplus and not in deficit. It is quite possible one may be surplus in one aspect and deficient in some others. These balances ought to lead us towards their continous strengthening of the surpluses and impel motivation of hard work with focus to cover the deficit. As an example, if the knowledge base, shows it is deficient in some areas, it means,one will have to, make efforts to acquire that specific knowledge within a given time frame.

Balance sheet readers and analysts always comment by measuring against industry average; the obvious difficulty is how to find what is the yardstick for the comparison of your personal balance sheet? I always compared my personal balance sheet with the 'magined' balance sheet of the person I admired most on the shop floor. This person, for each item of asset/liabilities could be a different person; and certainly it has never been only the holder of numero uno position, that stood in my admiration. The range has always been from the janitor, to a junior colleague and from a senior colleague to the CEO. Measurement of self has to be with the best.

Personal balance sheets are different essentially from an entity’s balance sheet in atleast one aspect.

An entity has only material items on its balance sheet, barring the few that may have intangible assets, like goodwill, trademark or patents -- otherwise each has a numeric quantitative value. A personal balance sheet is always a healthy combination of the moral and the material.

In the very early stage of my career, when the legendary president of the bank, mentioned about creation of this 'balance' in our personal lives; we held back our laughter- sounded comically idealistic. But, as one progressed in years, the idea gathered momentum and very soon established itself as one essential cornerstone of our thought and action. Material balance sheets have limitations of value; the moral balance sheet has no such barriers - it is limitlessly infinite. At some point in life, a decision has to be made, where would you like to see unending growth --- in the moral or the material.

The various heads of account in a personal balance sheet could be from the following non exhaustive list; technical proficiency, managerial and supervisory ability, communication skills, written and verbal, energy to excel, perform outside the call of the duty, continuing education, formalized training program attended, attention to feelings, charisma and above all 'reputation'. The numeric ones could relate to bank balances held, profits, dividends and bonuses received, plots bought and sold, investment in stocks and shares, etc.

There is nothing wrong to pursue the material; infact it is essential and imperative to do so. The only proviso is in its quest we must know how to keep it tamed and reined in. It is good to know that our DHA (housing) schemes are equally beautiful than the Mansions on Park Lane or in the county of Surrey; atleast we get to live in them.

It is indeed a misfortune for some of us, who reach the pit with massive balances of the 'material'. But alas! they do not accompany us, in the awaiting darkness. The only source of light in that cavity, comes from the moral balance sheet. Is it time for me to re-focus? Abandon the material . Seek the opposite. Readers may join to think, too.

The writer is a senior banker and freelance columnist