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  • Writer's picture Treavor Dodsworth CFP®, CPA, CKA®

#18 - Net Worth vs. Net Assets


Last post, we discussed why net worth can be a better metric than cash when measuring financial improvement. There are some dangers to becoming hyper-focused on net worth though.


I first remember hearing this concept from Jeff Cave from Eventide Funds. He spoke about unbundling your self-worth from your net worth. If you become hyper-focused on the bottom line, it is easy to start wrapping up our self worth in what that net worth number shows. 


Taking steps to separate the two is essential. If our self worth is tied up in our net worth, it will be much more difficult to make objective and wise decisions. I could see it heightening the emotions that can lead to poor financial decision making - namely greed and fear.


A simple name change, from Net Worth to Net Assets, is a start.


When we review our finances, we should also review our attitude toward our finances. Are we bundling our self-worth and net worth?

 

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Thank you for reading! What are the dangers of deriving our self-worth from our net worth?


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