SALN: Why you should have one too!

Way back in college, one of the subjects I disliked the most is Accounting. I just couldn’t get the concept as to how I would apply it in real life. I must admit that I kind of cheated my way to pass that subject because I do not want to face the wall and be embarrassed by our terror professor. No Kidding!

Came 2008 when I started playing the Cashflow game by Robert Kiyosaki, I learned my attitude towards money (aside from the Millionaire Mind Intensive of T. Harv Eker). This was also another eye opener for me in terms of understanding the Cash Flow Statement. But since I still hated accounting, I never fully understood its importance in my Financial Success.

We all know that it is important to SAVE and INVEST for the future but how come it feels like such a difficult task? How come not everyone is doing it?

I’m pretty sure you have heard the word SALN, right?

During the Impeachment trial of Chief Justice CJ Corona, the SALN became the latest buzz word not only in the senate but across all media as he was grilled to submit the sought after SALN.

When I attended the RFP Program (Registered Financial Planners Program Philippines) last February, one of our mentors, Mr. Rolly Robles, explained the importance of knowing by heart your CASHFLOW and your SALN or Statement of Assets and Liabilities a.k.a BALANCE SHEET.

I realized what hindered me all along was not clearly knowing my Cash Inflow and Outflow as well as my personal Financial Statement.

Akala mo mga politiko lang ang may SALN? Dapat ikaw din!

First things first.


An ASSET is anything that puts money in your pocket.

A LIABILITY is anything that takes money out of your pocket.

I can still clearly remember one of my colleagues at work who gave me an advise to “invest” in myself by buying luxury watches and bags.

I hate to break it to you (most especially to the ladies) but Branded Bags are not actually investments. They don’t give you income. Gadgets are not investments. Anything that does not appreciate in value is not an asset but considered a liability.

Once you learn to identify the difference between an asset and a liability, its time to do your SALN in five (5) easy steps!

STEP 1: List down your existing Assets

First, let’s list down your ASSETS.


As defined by Investopedia, a LIQUID ASSET is an asset that can be easily converted to cash. Hence, on this list, you may list down your cash savings, emergency fund, time deposits, etc.


Investment Assets are items obtained that will produce additional income now or in the future. It can be Tangible or Intangible.

Intangible Investment assets include mostly paper assets such as Stocks, Mutual Funds, VUL, UITF, Bonds, MRI, ETFs, Hospital Stocks, Etc.

Tangible Investment Assets include Real Estate Properties such as your home, rentals, etc.


Personal Property Assets may include Appliances, Jewelries, etc.

STEP 2: List down your existing Liabilities

Next, list down all your existing LIABILITIES such as but not limited to the following: Credit card, loans, mortgage, company loan, SSS Loan, Pag-Ibig Loan, Personal loans, etc.

If you want to get the excel file for this, just comment your email in the comment section so I can send it to you. 🙂

STEP 3: Add up!

Once you are done, add up all your assets and all your liabilities.

STEP 4: Knowing Your Net Worth

Then, to know your Net Worth, just follow this formula:


The result reflects your current financial state. Is your net worth positive or negative?
Step 5: Evaluation/Personal Assessment
The last step is your personal assessment. Your SALN will have no bearing on you if you will not reflect on the result.
If your net worth is negative, it may mean that you are spending above your means or way above the income that you are getting. Your next step is to either increase your income by finding other means to earn, or lessen your liabilities by paying it off and cutting off on unnecessary expenses.
If your net worth is positive, you are on the right track. Keep building your assets until you reach your desired financial goals. 🙂

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