Documenting your finances - a trader's capital journal

Course 14: Personal Finance and Building Capital

Educational material only. It is not accounting or tax advice. Keeping records does not replace your tax obligations. The spreadsheet examples are simplified and serve to illustrate the principles of measurement.

Traders love trading journals, but they ignore the financial journal. The result: they know what the outcome of the last trade was, but they do not know whether their net worth is growing, how much their trading really costs them, and how much tax they will have to pay in April. This lesson closes Course 14 and combines all the elements into one system that takes 10 minutes a week.

Without financial records there is no feedback loop. Without a loop there is no improvement.

The goal of this lesson

By the end of this lesson you will be able to:

1. Build a simple “Trader’s Cockpit” spreadsheet with 5 tabs.
2. Run a weekly financial review in 10 minutes.
3. Prepare data for your tax settlement (PIT-8C) without panic in March.
4. Define a monthly net worth report and its rate of change.

Why a trading journal is not enough

A trading journal answers the question: “Does my system work?”

A financial journal answers the question: “Am I, as the company ‘Me Sp. z o.o.’, heading in the right direction?”

You need both.

One without the other is half the picture.

Trader’s Cockpit architecture - 5 tabs in a spreadsheet

You do not need complicated software. One Google Sheets / Excel file with 5 tabs is enough.

Tab 1: Dashboard (a 10-second glance)

3 numbers and 2 ratios, updated once a week.

MCU = [          ] PLN
Emergency fund = [          ] PLN  -> WFA = [ ] months
Net worth (excluding the apartment) = [ ] PLN

Consistency ratio of deposits to the base = [ ]%
Monthly trading cost as % of capital = [ ]%

If WFA <3, the dashboard turns red. That is your DO NOT TRADE filter.

Tab 2: The 3-Account Budget

A monthly table, copied from Lesson 02.

Control formula:

control_balance = income - MCU - all_transfers - wants
Goal: control_balance = 0 (every zloty has a job)

Tab 3: Debts and WFA

Trend = whether the debt is shrinking and WFA is growing. Visually.

Tab 4: Brokerage Accounts and Tax

The key to a calm April. You collect the data here as you go, not at the last minute.

Formulas:

net_profit_to_reserve = sum(net_profit_trades) - sum(net_loss_trades) [realised only]

tax_reserve = max(0, net_profit_to_reserve) * 0.19

Remember: in Poland you settle stock-exchange losses in your annual return (you may deduct them). Keep a separate register for each tax year.

At the end of the month you do the summary in one go:

month_summary = (
  gross_profit,
  commissions_total,
  net_profit,
  tax_reserve,
  transfer_to_base (per the 50% rule from Lesson 04)
)

Tab 5: Net Worth and Capital

Calculated once a month, on the last day.

net_worth = (cash + emergency_fund + brokerage_accounts + ETF + IKE + IKZE) - (total_debts)

liquid_worth_without_retirement = net_worth - IKE - IKZE (because of the penalty for early withdrawal)

monthly_change = (net_worth_this_month - net_worth_previous) / net_worth_previous

This is your real “capital curve”. The curve on the broker platform is only a part of it.

The routine: 10 minutes a week + 30 minutes a month

The system has to be light, otherwise you will abandon it.

Weekly routine (Sunday, 10 min):

1. 2 min - Update the Account 1 and Account 2 balances, recalculate WFA.
2. 3 min - Enter the week’s transactions into Tab 4 (gross profit/loss, commissions).
3. 2 min - Check the DO NOT TRADE filter: is WFA at or above 3? is debt above 10%? is cost% above 15%? If not - plan a week without adding funds.
4. 3 min - Write 1 sentence: “This week the most important financial thing was: ___”

Monthly routine (last day of the month, 30 min):

1. 10 min - Close Tab 2: actual vs planned MCU, where is the leak?
2. 10 min - Tabs 3 and 5: WFA, debts, net worth. Is it growing? Calculate the rate of change.
3. 5 min - Tab 4: summary of commissions, tax reserve, transfer to the base per the rule.
4. 5 min - Decision for the next month: how much K (the capital-building pool) and the base/trading split based on WFA and the discipline from the trading journal.

Decision sentence template:

In [month] WFA = [X], trading_cost% = [Y]%, consistency = [Z]%. 
Therefore K = [amount], split base [70]% / trading [30]%. 
I do not add funds if [condition].

Formula: cost control as % of capital - the alarm

This is the most important early-warning ratio.

monthly_cost_pct = (monthly_commissions + estimated_spreads + monthly_platform) / average_trading_capital

Alarms:
monthly_cost_pct < 2% -> green
2-5% -> amber, check the number of trades, reduce overtrading
>5% -> red, stop, go back to demo / educational

annual_cost_pct = monthly_cost_pct * 12

Example: capital 4000 PLN, commissions 80 PLN, platform 100 PLN = 180/4000 = 4.5% a month = 54% a year. You have to make 54% just to cover costs. That is a signal that the account is too small for this level of activity.

When the plan says do not trade

When the plan says: DO NOT TRADE (documentation context)

DO NOT TRADE IF YOU DO NOT HAVE UP-TO-DATE RECORDS:

1. You have not updated the Cockpit for more than 14 days. You are trading without measurement. It is like a pilot without instruments. 10 minutes and you are back.
2. You do not know how much you have set aside for tax. If the tax reserve sits in the trading account and is in open positions, you may be forced to sell at the worst moment in April.
3. Your net worth is falling 3 months in a row despite profits on the platform. That means living costs / debts / spending are eating the trading. You have to go back to Lessons 02 and 03.
4. You have more than 5 unrecorded deposits/withdrawals to/from the broker. Chaos in cash flows = no way to calculate the rate of return. Stop the deposits, record them, and only then decide.
5. You do not have a monthly summary. If you cannot say in 2 sentences how much trading cost you last month, you are not controlling ruin risk.

Documentation is not bureaucracy. It is an early-warning system.

Mistakes that cost the most

1. 100 columns in the spreadsheet, zero filled in. Perfectionism kills consistency. Start with 5 tabs and 10 numbers. A simple spreadsheet filled in every week is better than an elaborate system abandoned after 3 days.

2. Keeping everything in your head and in the banking app. Financial memory is unreliable. After 30 days you do not remember whether a 500 PLN deposit went to the fund or to trading. The spreadsheet is the truth.

3. No separation of the tax year. You mix transactions from 2024 and 2025 in one bag. In March you spend 2 weekends splitting them apart. The solution: in Tab 4 filter by year and keep separate totals.

4. Hiding debts from yourself. You do not enter a 0% instalment debt, because “it is not a debt”. It is a liability. If it is not in the spreadsheet, it does not exist in your decision. Enter everything you have to pay back.

5. No backup. A spreadsheet on one laptop with no backup = one failure and you lose the history. Keep it in the cloud (Google Sheets / OneDrive / Dropbox) with version history. Once a quarter, export to PDF.

Measurable exercise [45 minutes - building the Cockpit]

Goal: Build a 5-tab spreadsheet and run the first review.

1. 15 min - Create the spreadsheet: Name it “Trader’s Cockpit 2026”. Create 5 tabs as described: Dashboard, 3-Account Budget, Debts and WFA, Accounts and Tax, Net Worth.

2. 10 min - Dashboard: Enter today’s MCU (from Lesson 02), the emergency fund, WFA, net worth (the sum of all accounts). Enter the cost ratio from the last 30 days.

3. 10 min - Historical data going back: Go back 30 days. Enter all transactions into Tab 4 (from the broker’s history) and all expenses into Tab 2 (from the statement). Calculate the tax reserve.

4. 10 min - First decision: Based on the dashboard, write the decision sentence for the next month (template above). Put the date of the next review in your calendar (weekly).

Completion measure: Do you have a spreadsheet in which you can answer within 60 seconds: WFA, trading cost %, tax reserve, net worth? If yes, passed. This is your new cockpit.

Check yourself

Question 1: Your spreadsheet shows WFA 2.1, trading cost 4.8% a month, and net worth falling for 2 months. What should you do in the weekly routine? Answer: Trigger the DO NOT TRADE filter. Priority 1: rebuild WFA to 3+. Priority 2: reduce trading costs - cut the number of trades, go back to demo/educational. In the routine write the decision: K for the next month = 0 PLN for trading, 100% to the fund/debts. Record it in the financial journal, not the trading journal.

Question 2: Why should you keep the 19% tax reserve in a separate sub-account, not in the trading account? Answer: So that it is not exposed to market risk and is not used for further trades. Tax is a liability, not capital for trading. Keeping it in the trading account ends in a situation where in April you have to close positions by force at a loss in order to pay the PIT.

Question 3: Why calculate net worth if most of it is in the trading account anyway? Answer: Because the trading account is only a part of it. If the account is +500 PLN but the card carries -2000 PLN of debt and WFA fell from 3 to 1, your financial situation got worse despite the “profit” on the platform. Net worth shows the whole company “You”, not just one department.

Frequently asked questions

Do I have to use Excel? Can I use a budgeting app? You can, as long as the app lets you export the 5 key numbers: MCU, WFA, trading costs, tax reserve, net worth. Most budgeting apps do not calculate the tax reserve or the cost as % of capital. That is why a spreadsheet is the most universal. You can combine them: a budgeting app + a simple spreadsheet for the cockpit.

How often should I calculate net worth? Once a month, on the last day. Calculating it more often with a small base and high variance leads to emotional swings. Once a month is enough to see the trend.

What about PIT-8C and losses? The brokerage house sends you PIT-8C (usually by the end of February). You can settle losses from previous years over 5 years. Keeping Tab 4 throughout the year means that in February you only compare your totals with the PIT-8C and pass them to your accountant/adviser, or settle it yourself. You are not a tax adviser - the spreadsheet does not replace the return, it only prepares the data.

What if I do not want to count to the last zloty? Count to the nearest 100 PLN. It is about the order of magnitude and the trend, not accounting perfection. WFA 2.1 vs 2.15 does not matter. WFA 2 vs 5 matters enormously. A 10% error is acceptable, no measurement is not.

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Summary of Course 14:

1. You go bankrupt not because of strategy, but because of a missing WFA.
2. The 3-account budget and WFA are your DO NOT TRADE filter.
3. Educational capital is 500-2000 PLN, test capital 2-10k, operating capital 10k+ and WFA 6+.
4. The base portfolio (ETF/IKE/IKZE) and the trading portfolio are two different worlds, two different KPIs.
5. Compound interest works only after costs, taxes and with no withdrawals for living expenses.
6. A 5-tab cockpit and a 10-minute weekly routine close the feedback loop.

Before you increase risk in the market, increase your WFA, lower your cost as % of capital and update the dashboard. Those are the three levers that always work, regardless of what the market does.

Your task for the next 30 days: Keep the 10-minute weekly routine for 4 weeks. If you manage, you have a system that will survive for years. If you do not, simplify the spreadsheet even further.

End of Course 14.

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