Better Than Net Worth….

What’s your net worth?

What you’re probably thinking about right now has something to do with your money or investments, right? Makes sense. This is a money and investment blog.

Below is a definition of “net worth” from Investopedia:

An individual’s net worth is simply the value that is left after s/he subtracts her debt from her assets. Examples of debt includes mortgages, credit card balances, student loans, car loans, etc. An individual’s assets include checking and savings account balances, value of securities such as stocks or bonds, value of his or her home, market value of automobile, etc. In other words, whatever is left after selling all assets and paying off personal debt is the net worth. Note that the value of personal net worth includes the current market value of assets and the current debt costs. – Investopedia

But isn’t net worth really about your worth and NOT your wealth

And doesn’t worth come from who you are? Who you’ve helped in this life. How many people breath just a little bit easier because they have known you… isn’t that what worth is about? Your value to your spouse, your family, your friends, your community and even yourself?

My senior year physics teacher, Mr. Hicks was one of those people who provided an incredible amount of worth.

He made an Illinois teacher’s salary (read: not much). So his net worth, financially speaking, may not be as high as someone who spent their entire life climbing the corporate ladder.  But… the way Mr. Hicks taught a difficult class like physics to me and the rest of the students in district 220 in Barrington in the 1980’s was amazing.

Mr. Hicks, or how students like to call him “Uncle Jim,” was a public school teacher for 37 years! Below is a picture of him and two other physics teacher and the districts superintendent. Uncle Jim is on the far left.

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Uncle Jim created a space so students wanted to want to learn.

Our class was not only hard but really fun. It’s still the only class I remember constantly laughing in every week. He made learning physics fun. Uncle Jim would only call me “RCP2” I don’t remember him every using my real name. And he did this with most students. He made us all feel special.

A got a B- in his class, which if you add in my dyslexia means something special was going on in there. He made me want to figure things out and study and ask for help. And I did.

He held a high level of expectation for every student. Mr. Hicks expected every student to get an A. And he would be there to help them.

Mr. Hicks’ net worth was huge.

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When most people think of the term, net worth, what I really think their doing is thinking of their net wealth. But “net wealth” is not a term, at least not yet. But it’s the right term.

Net Wealth feels different to me.

Net wealth doesn’t have judgement or value. Net wealth is simply about your money. How much financial wealth do you have?

And financial wealth can only be in five asset classes (Stocks, Bonds, Cash, Commodities and Real Estate).  This distinction makes measuring your ‘money numbers’ clean… or at least cleaner. There’s no value judgement here. It’s simply a number.

Maybe you want the number to be bigger or produce something different, but still it’s just a number.  And don’t get me wrong. Net wealth is an important number to know, track and measure.

Net wealth tells you something about how many choices you are going to have tomorrow and next year. Net wealth tells you how you can vacation. And how many times you can visit your kids or grandkids.

Net Wealth is an important number to know and track. And yet, almost no one tracks its. Why? Because they don’t know how to. They don’t want to know what that number is. It’s like stepping on the scale. People don’t want to know they gained 10lbs or even more.

But Net Wealth is the number to track.

And when people connect to their net wealth they start growing it. And when a person’s net wealth starts increasing their choices increase. And then their net worth can also increase (read: they can help more people).

Like Mr. Hicks. I hold a high level of expectation for you.

I want you all to get A’s.

And one of the ways to start working towards that A is to measure your net wealth each month. This one measurement will tell you what to focus on, what is working best and what needs your immediate attention.

In Your Corner,

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RC Peck, CFP

P.S. The first step in growing your net wealth is to get connected to it. To know what is and is not working. It’s this connection that tells you where to look and what to focus on. It’s incredibly simple once you know how. If you’d like to know more about how to connect to your net wealth and grow your choices please click here to get onto my calendar.



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