Financial freedom by age 65

Updated Jul 31, 2012

Kevin Cropped E1325884175900ile the average American will earn between $600,000 and $2 million in his or her lifetime, most people do little or nothing to save a part of those earnings. Only 10 percent of U.S. citizens reaching age 65 are financially independent.

In the end, it’s not that important what we earn. Rather, what we keep makes all the difference.

Start down the road to financial freedom by figuring out where you are now. Do this by creating a balance sheet to calculate your net worth. The balance sheet compares your assets with your liabilities. The difference between them is your personal net worth.

If you are a company driver, create just a personal balance sheet. If you are an owner-operator, you’ll also need to create one for your business.


BUSINESS BALANCE SHEET. Creating a balance sheet for a single-truck owner-operator business is fairly simple. Start with what your business owns. Write down how much money is in your business checking and savings accounts. Don’t forget things like any escrows or maintenance reserves.

Next, determine how much your equipment – truck, trailer, tools, etc. – is worth. Use online resources to help determine fair market value. I like to use for the truck and trailer, for instance. Add these numbers together to get your total business assets.

Next are your business liabilities. These are your truck or trailer loans, business credit card balances, outstanding accounts with vendors, repair shops, etc. Add these together for your total liabilities.

Subtract your liabilities from your assets, and you have the net worth of the business. If the number is positive, it becomes an asset on your personal balance sheet. If it’s negative, it’s a liability.


PERSONAL BALANCE SHEET. Now pull together your personal financial information. Gather bank statements for checking and savings accounts, credit card statements and loan documents.

List assets first:

• Cash (in the bank, money market accounts, or CDs)

• Investments (mutual funds, college savings accounts, individual securities)

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• Home resale value

• Automobile resale value

• Personal property resale value (including jewelry, household items and the like)

• Other assets, including the value of the business if it was a positive number

The value of your truck is an asset, which improves your net worth. The balance of an outstanding truck loan is a liability, decreasing net worth.The value of your truck is an asset, which improves your net worth. The balance of an outstanding truck loan is a liability, decreasing net worth.

Next, look at personal liabilities. Common categories include mortgage and car loan balances, student loan and credit card balances, and any other outstanding loan. Add them up.

The difference between your assets and liabilities is your net worth. Continually increasing personal net worth — by decreasing liabilities and increasing assets — should be one of your long-term goals.

Don’t be discouraged if you have negative net worth. Many people avoid this process because they don’t want to see the results, but don’t fall into that trap. Setting goals and improving your financial situation is much easier once you know your net worth.

This is the starting point for any good long-term financial plan. Now you know exactly where you stand financially and you can start working to improve your situation. Make sure you continuously update your balance sheet – at least twice per year – to ensure you are meeting your financial goals.


Kevin Rutherford is an accountant, small-fleet owner and the host of “Trucking Business & Beyond,” which airs on Sirius XM Radio’s Road Dog Trucking Radio. Contact Rutherford through his website,

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