Computing Your Own Net Worth

by Wes Bridel on April 6, 2009

in Stewardship

Net Worth is the sum total of assets minus liabilities.

Create a list of your assets and liabilities

Create a list of your assets and liabilities

In financial terms, when you subtract all the money that you owe from that which you own – you are left with your net worth.  Most financial pundits consider this the be all/end all number defining your wealth.  As you’ll see, cash flow is a far more important predictor of wealth in your life and has a much greater influence on the impact your life makes for the Kingdom than net worth does.

That being said – it’s still important to know your net worth

When your net worth is negative, you have entered debt.  Many people confuse debt with liabilities.  These are actually two very different things.  When you take out a mortgage to wisely invest in a house – you don’t adopt a debt.  Instead, its a liability that brought with it an asset.  At the moment of your purchase, this does not affect your net worth at all.  If you invested wisely, the decision may very soon increase your net worth and/or cash flow.

If on the other hand, you used a credit card to buy depreciating “toys” with money that you do not have, you enter debt with the transaction.  If you do much of this in your life, you will enter an overall debt situation where you owe more money than you have in assets.  This is to be avoided at all costs.

Human life value debts might be relationships that suck us dry.  For instance, if we are constantly giving of ourselves to someone in an unprofitable manner, this is a liability.  Often God calls us to give of ourselves to people when we do not directly gain from the transaction, but when this is the case, God Himself will fill us up after we have poured ourselves out.  This is a liability for which God provides the corresponding asset.  However, we often fall into the trap of spending our time in relationships that hurt one or both of the parties involved.  When this is the case, we should break off these relationships. They are pure debt.

Why don’t you take a few minutes and list all of your financial assets and liabilities on a piece of paper.  Then make a  list of your relationship assets (the people in your life), including your knowledge/wisdom/experience/skills/gifts/value assets.  Some of it may be too private to share here publicly, but we’d love to hear any other ways that you can apply this concept of assets and liabilities to the most important area of life….human value.

Will your share with us?

Photo credit: romanlily

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