We Get What We Measure

We Get What We Measure

Whether we're talking about individuals, corporations, non-profits or nation states, it would be fair to say that financial security is a universal goal.

And when assessing our security, the only way to determine our financial state - or its trajectory - is by measuring it, which is the role of accounting.
Financial statements tell our financial stories. 

To know where we stand today we measure our net worth - by comparing our assets and liabilities. That’s the story our balance sheet tells.

To know how we’re progressing, we measure our generation and consumption. That’s the story of our income statement.

Understanding these two reports puts us in the driver's seat to take charge of our financial lives. That’s the power of accounting literacy.

But can achieving accounting literacy truly impact our financial well being? There is one group which suggests an answer to that question.

Senior citizens in The Netherlands have the highest percentage of their income coming from personal savings (42%) of any such group in the world.

Is it a coincidence that The Netherlands has a historic place as a pioneer in the art and science of accounting, and that bookkeeping was a widely held skill in cities like Amsterdam going back centuries? 

I think not.

Best regards, Peter