The first step in developing a financial plan for someone is to create a Financial Net Worth statement.
Net Worth = Financial Assets – Liabilities
Make a list of your assets and liabilities. Then calculate your net worth. What do you get?
Every other client asks us this question:
“How does my net worth compare to your other clients?”
I just love this question. Unfortunately, to the disappointment for many, my answer is usually:
“Who should you compare it to?”
May I make a suggestion?! We should only focus our comparison against our own goals…our own ambitions. Don’t try to put yourself in this BOX with everyone else!
Next time when you update your financial net worth statement, take a look, but with an objective mind. Instead, think about where you were last year and how far you’ve come. If you are short of your goal, then revisit your goals and make a mid-course correction.
I bet that once you start noticing your progress, rather than concentrating on your destination, not only will your net worth improve, but so will your self worth. And at the end of the day I would never compare my self worth to anything. Why would you?