Why Your Net Worth Statement Isn’t Doing You Any Good

Throw your Net Worth Statement in the trash. Every year most Americans look at this piece of paper riddled with dollars and cents and they draw drastic conclusions about their financial success. Often when I sit down with clients, there is a tendency to look solely at that final number—the one you get when you subtract your total liabilities from your total assets—and derive satisfaction only if the number is higher than the previous year’s.

We’ve been wrongly conditioned to identify success and happiness with larger amounts of money in our bank accounts, and very rarely do we celebrate the milestones that our money helped us experience.

I invite you to consider your upcoming year and events. Think about things like family reunions, big football games, Caribbean vacations, taking a road trip along the California coast, decorating the new guest bedroom and so on. These are all things that your finances empowered you to enjoy. Amend your Net Worth Statement to include a new line item:

“Where My Money Took Me”

I’ll be inviting my own clients to amend their Net Worth Statements this year, as I have amended my own from 2014. For my family, I added: the trips I took to meet my baby niece and the beauty that I saw on a trip to the Northwest. I also included buying a new home, the luxury of decorating it and buying the furniture we wanted to make our guests feel welcome and comfortable.

Yes, the figures are important, but it would be a shame to not include the life we've been able to experience because of them.