Welcome to the planning grid. Now this is something I set up every time I talk to a client or prospective client. It helps me understand their situation and I hope it helps them understand their situation. Um, now this grid has four measures and two metrics that sit at the heart of every plan and we'll go through them quick.
Top left. MCI, money coming in. Uh, it's basically your income. MGO, money going out. These are the expenses that you, uh, you, that you've used to live your life. Now, uh, this creates a net cash flow and, and money flows in this direction. Now this is basically your checkbook, uh, with a few tweaks in it. Um, so If this is a positive number, positive net cash flow, great.
It becomes something that you own. It becomes your savings. Now this particular quadrant, uh, it's broader than just dollars. I look at, uh, the own side is for people to think of in terms of something that you value, that you possess, that you value, or that can create value for you. Um, something that can generate income for you, uh, something that can generate income for future generations, be it, uh, for your, for your family through legacy planning, or for, uh, your community through charitable, um, planning, uh, personally, in this quadrant, the thing these days I value most is time.
Next. The old owe column. This is these are your future obligations. Now, uh, these are obligations against future income debt is an obligation against future income and there's good debt and there's bad debt and we'll talk about that that in the future. It's at some point in the future. Uh, these two fluctuating value over time and create something called your net worth.
Now here's a secret. If you had if you have A positive net cash flow something to think about here great. It's something you own But if you have a negative cash flow, the only way that you can cover that is by selling something you own Or borrowing money something to think about next different types of income