Moorman and Company

The most valuable asset a person possesses is the ability to produce money by one's own personal efforts. Income is the well spring from which all financial freedom flows. Take away the income, and there can be no saving, no investing and no future financial freedom. In this way, your financial surety—your fortune—is in your hands.

In fact, we can use our hands to view our entire financial picture. With practice, you can use this simple method to conduct a review of your finances anywhere, anytime. You don't need records or statements. Your hands are always with you.

Let's start with the right hand. With apologies to my left-handed friends, we most often refer to our "good right hand"—the hand with which we wield the tools of our trades, whether they be the spade of a gardener or the mouse button of a computer programmer. It is this good right hand that provides us with income.

But the hand is not a solid block of bone and flesh. The hand is a thumb and fingers. The key is the thumb. Without this opposable thumb, we would not be humans, but some other creatures. Just as the thumb is the indispensable asset of humans, it is essential to our financial lives. We call the thumb of our right hand "salary/wages."

There are hazards to our ability to earn, such as accident, sickness or disability. We must protect this exposed thumb by forming a ring with the forefinger—health and disability insurance. Thus linked, the thumb (salary/wages) and the forefinger (health and disability insurance) guarantee the flow of income.

The other three fingers of the right hand represent other sources of income, which we will explore in future articles. For now, remember this: the right hand is the wellspring of our future financial freedom, the source of income.

What about the left hand? As you might expect, it is the companion-supplement to the right hand. Simply put, the right hand produces income, and the left hand disposes of that income. More important is the method by which the left hand disposes of income. If money is allowed to run through the fingers of the left hand like water through a sieve, when we need it to support us, the left hand will be hopelessly weak. Only when the left hand is put to work will muscle develop.

So, just as the right hand is essential to commence financial freedom, the left hand is essential to complete that goal. At the beginning of this article we said that our most valuable asset is our ability to produce money by our own personal efforts. Here's an important addition: the full value of one's ability to produce money can only be measured by the ability to retain and utilize a substantial portion of that money for future use. Thus, our left hand is our savings and investment hand.

Is there a counterpart in the left hand to the ring of income security formed by the thumb and forefinger of the right hand? Yes. The thumb of the left hand represents our liquid assets—our emergency savings account, savings for near-term expenses and accumulation account for other investments. The forefinger is life insurance—the guarantor of our estate. This is the ring of investment security.

The remaining fingers of the left hand represent other investment choices, the components of our future financial success. These, too, will be examined in a future article.

Together, our two hands hold all the necessary elements of our financial lives, income and investments. To ensure financial health, just as to ensure physical health, they need exercise. I like to use the analogy of a push up. When we first start doing them, we may only be able to perform a few. As we continue, and our hands grow stronger, we can do more and more push ups. Finally, when we've perfected our technique, we can even perform a one-handed push up.

That is precisely what we must someday be able to achieve financially. We must exercise and strengthen our financial hands so that one day, when we retire, we can support ourselves solely with the left hand.

Financial freedom is not any specific amount; it is simply the ability to do what you want, when you want, in the way you want to do it. You possess the means to achieve that freedom—the fortune in your hands.