𝗦𝗜𝗫 𝗦𝗨𝗥𝗘 𝗪𝗔𝗬𝗦 𝗢𝗙 𝗥𝗔𝗜𝗦𝗜𝗡𝗚 𝗬𝗢𝗨𝗥 𝗙𝗜𝗡𝗔𝗡𝗖𝗜𝗔𝗟 𝗡𝗘𝗧 𝗪𝗢𝗥𝗧𝗛 𝗜𝗡 𝟮𝟬𝟮𝟭

 
Not knowing one’s actual worth is almost akin to being worthless; and this deficiency has a heavy unpleasant psychological impact on one’s mentality. People are quick to learning new skills, reading new books, trying out new ventures, making new friends, accepting new jobs and the list goes on and on. But many people do not take out the required amount of time to learn about themselves. One of the most rewarding knowledge anyone should acquire, is ‘self-awareness’ or ‘knowledge of oneself.’ Let me ask you a simple question: what is your current financial net worth? Knowing this stack reality may be the game changer for you in the coming year. This is not about some ‘blind’ positive confession and ‘unrealistic’ goal setting moves. You need to do this personal assessment and use it to redirect your targets. Well, that is what I want to help you achieve through this post; because your net worth is one number that greatly determines how successful you are at building assets for your future.

First and foremost, what is net worth. Net worth is the difference between the values of your asset and liabilities. In simple terms, 𝑨𝑺𝑺𝑬𝑻𝑺 – 𝑳𝑰𝑨𝑩𝑰𝑳𝑰𝑻𝑰𝑬𝑺 = 𝑵𝑬𝑻 𝑾𝑶𝑹𝑻𝑯. Now, let’s look at what I call the ‘Organic Factors’ for boosting your financial net worth.

𝟭.           𝗥𝗘𝗗𝗨𝗖𝗘 𝗬𝗢𝗨𝗥 𝗟𝗜𝗔𝗕𝗜𝗟𝗜𝗧𝗜𝗘𝗦 - I define ‘li-ability’ as ‘limitation of ability’. That means, any responsibilities, acquisitions and commitments that ‘limit your ability’ to be financially independent. According to the International Financial Reporting Standards (IFRS) Framework, “A liability is a present obligation of the enterprise arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits.” Examples of liabilities include but not limited to: loans, Mortgage debt, Money owed to suppliers, Wages owed, Taxes owed, Utilities, cost of maintaining unused properties (i.e. non-economic properties), amongst others.

2.            𝗜𝗡𝗖𝗥𝗘𝗔𝗦𝗘 𝗬𝗢𝗨𝗥 𝗔𝗦𝗦𝗘𝗧𝗦 - While liabilities are ‘negative adjustments’ your assets are ‘positive adjustments.’ Assets are items or properties owned by a person or company, which have values and are available to meet debts, commitments, or legacies. Land, investments &Return on Investments (RoI), stocks, collectibles like jewelry; arts, primary residence, rental properties, incomes, retirement account balance, etc. are examples of assets. Did I mention that skills and knowledge are great assets? Well, they are! Maybe you should find out what your current skills worth financially. You can use dice.com, payscale.com or glassdoor.com for this finding; but be careful not to over rate your skills. At the same time, do not leave any asset out, no matter how small.

3.         𝗥𝗘𝗩𝗜𝗘𝗪 𝗬𝗢𝗨𝗥 𝗘𝗫𝗣𝗘𝗡𝗦𝗘𝗦 - If you do not have a budget, this should be your first task in reviewing your expenses. You should have daily, weekly, biweekly, and/or monthly budget. For the purpose of this review, attempt to trim your expenses, identify and completely eliminate any extra budgetary expenses. Pleasure trips and vacations, extravagant purchases, unguided philanthropy, white elephant projects and quick-riches-investments are some examples of expenses you need to review. I know many of you will come for my head but I need to tell you the truth: also avoid ‘manipulative seed sowing’ exercises. I believe in “seed sowing’ but if it is psychic, please run away, because it is no longer faith-based.

4.            𝗥𝗘𝗟𝗢𝗖𝗔𝗧𝗘 𝗬𝗢𝗨𝗥 𝗠𝗢𝗡𝗘𝗬 - Listen to me, some people are poor and may remain poor because their money are in the wrong locations. You need to be investment minded rather than savings conscious. Invest for recurrent income generation.  In plain terms, keep your money where it will grow. I believe that money is a living thing, because it can grow. If it is not growing in your hands, then it is dead and not useful.

5.            𝗦𝗘𝗘𝗞 𝗣𝗥𝗢𝗙𝗘𝗦𝗦𝗜𝗢𝗡𝗔𝗟 𝗙𝗜𝗡𝗔𝗡𝗖𝗜𝗔𝗟 𝗜𝗡𝗧𝗘𝗟𝗟𝗜𝗚𝗘𝗡𝗖𝗘 – I admit that nobody knows it all. I personally consider it as a great investment when you spend money seeking information, knowledge and professional guidance on selected important issues. People have personal/family doctors, personal/family lawyers, but only very few have personal/family financial counsellors. Think about it, and what can you do differently?

6.            𝗕𝗨𝗜𝗟𝗗 𝗬𝗢𝗨 𝗡𝗘𝗧𝗪𝗢𝗥𝗞– a healthy network is directly proportional to a heavy net worth. Look at your circle of friends, how many of them are where you want to be? Do not undermine your connections, keep them mounting up, as long as the network is healthy and valuable.

For me, planning for 2021 has started and what I have shared with you now are what I have been applying on myself. The journey to a prosperous new year does not begin with the first day in the new year but months before it. I feel some of you will like to come onboard now. Let’s start rocking 2021 now and not wait till January 1st. dare to think ahead, act ahead and you will be ahead. Lest I forget, I have a bonus point for you:

7.            𝗕𝘂𝘆 𝘁𝗵𝗲 𝗰𝗮𝗿 𝘆𝗼𝘂 𝗰𝗮𝗻 𝗱𝗿𝗶𝘃𝗲 𝗙𝗢𝗥𝗘𝗩𝗘𝗥.

𝘼𝙎𝙎𝙄𝙂𝙉𝙈𝙀𝙉𝙏: What do I mean by “Buy the car you can drive FOREVER”? Write your answers in the comment section.

I wish you a prosperous 2021.

©Godday Aghedo, December 2020