Personal Finance Buzz

Why net worth sucks as a measure of wealth

In his book, Wealth, is it Worth it, Mr. Truett Cathy, the founder of Chic-fil-A, has provided us with a wisdom he has accumulated over a lifetime. Truett does not present this as a researched treatise but rather as a series of vignettes which answers the question whether our efforts (or any effort) to accumulate wealth, is worth it…

For some reason, people with an interest in personal finance like to track their net worth as a measure of progress. While useful as a measure to track progress and as a measure to compare with other people, it does not show how well the person performs financially.

One financial goal is to work towards a positive net worth, which indicates that you can pay off all your debts if you need to, or you’re already debt-free. In this way, net worth can be one measure of your financial health and well-being.

If you have a complex tax return, or multiple tax returns, it’s probably worth it to pay someone else to take care of things. You’ll stress less, and have some measure of protection.

Believe you way to wealth, means two things. 1st that your god wants you to be wealthy, and 2nd that you can become rich if you continuously keep your focus and drive. Both work hand in had to help create wealth!

YahooFinance.com recently published 5 tips to build wealth and success. Now, I don’t know that you could really say such tips will make you successful. What does that mean, anyway? I think the definition of success is different to a lot of people. But one thing I do know, building wealth, or increasing your net worth requires a lot of good financial stewardship. For instance, if you spend all your money and never save or invest, you’ll have nothing to show for it.