Income vs. Net Worth

Building your financial fortress requires a completely different view-point then the common views out there. Far to many people look at income and focus on income when the reality is:

It’s about the net.

Here’s why. You can gross $100,000.00 a year and spend every dime and have no money and even owe money and be totally behind the eight-ball and think you’re doing well.

Or, you could make $50,000.00 a year and spend $45,000.00 of it and keep $5,000.00 dollars and be way ahead of your colleagues.

It’s not what you make, it’s what you keep. It isn’t how much money you run through the checking account…it’s how much you keep in the checking account.

Every time you borrow money you spend money you haven’t made yet. You are, in fact, spending money you’ll make next year to satisfy the money you’re spending today.

All you have to do is add up assets and subtract what you owe…this equals your net worth. If your net worth is a negative (-) than you are in the hole.

The way to get positive is to pay off all your debt then rework the calculation and you’ll discover you are in the positive.

David Dassow