Dr. Sorrenson (second from right looking at photo), her husband, Joel (to right of her as looking at photo) and Dr. Sorrenson’s sister and brother-in-law at their pool in Cozumel, Mexico, where Dr. Sorrenson and her husband have a vacation home. She says that maintaining both professional and personal balance sheets helps ensure she has the life she wants.
Tracking your personal finances as meticulously as you track your practice finances.
By Laurie Sorrenson, OD, FAAO
Jan. 24, 2024
I usually don’t like articles and books about investing, or discussions that are just about money. I find it boring. Love business, hate investing. That is why I have two different financial consultants and an investor! So that I don’t have to do it!
I am a big believer in hiring people who are good at what they do, and I stick to what I am good at!
BUT I just read “The Business Owner’s Dilemma” by Ali Nasser. It is a really short book, yay! One aspect of the book that struck a chord with me is the notion of crafting your own Personal Balance Sheet.
What is a Personal Balance Sheet?
While I’m accustomed to overseeing the Balance Sheet for our businesses, put together by my chief operating officer and accountant for the annual bank submission, I never took the initiative to consolidate all of the assets, liabilities and businesses shared with my husband.
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I realized the lack of a comprehensive overview was putting our financial investor and advisor at a distinct disadvantage in providing us with advice.
So, I decided to create a Personal Balance Sheet.
I tried using some templates online and decided that wasn’t for me. So all I did was use a Google Sheets document, list all our assets on the left (houses, cars, jewelry, art, land, businesses, furniture), a column for the value of each asset, a column for the debt for each asset and then used a touch of Excel magic via custom formulas, and everything seamlessly added up and subtracted.
What Goes on a Personal Balance Sheet?
I put everything on there including our family farm (and the cows :-)) that we purchased from my husband’s parents. It was interesting and eye-opening! Our financial advisor was thrilled to have that all in one spot for him! I love having it in Google sheets so that I can update it any time I open up my computer or phone.
“The Business Owner’s Dilemma” also had great insights and studies about what happens to entrepreneurs when they retire. Nasser talks about the Re-investment Dilemma, Legacy Dilemma and the Exit Dilemma that I think all optometric business owners can relate to! It really made me think about what “retirement” looks like to me. I have never been comfortable with the idea of “retirement,” and now I know why.
According to multiple articles that reference a PricewaterhouseCoopers survey, 75 percent of business owners surveyed say they “profoundly regret” their decision to sell their company within 12 months. Other articles quote the Business Wealth Solutions and the Exit Planning Institute, noting that more than 70 percent of business owners who sold their business regret the decision within a year of the sale. This book helps you think and plan about how to not have those regrets.
As my son and practice partner, Eric Hammond, OD, says of me…..…“She ain’t ever gonna retire!” 😁 😜
Laurie Sorrenson, OD, FAAO, is president of Lakeline Vision Source in Cedar Park, Texas, and the Professional Editor of Review of Optometric Business (ROB). To contact her: lsorrenson@gmail.com.
