How I Measure Net Worth
How I Measure Net Worth
It is clear from previous posts that I think money goals are more often rabbit holes than helpful. This push away from numbers has led to a certain degree of market apathy. I just don’t want to spend my time pouring over numbers all day and worrying about returns. We in the financial community, however, are trackers by nature. If it is not measurable, than does it exist? Since I don’t update my Personal Capital account and I have stopped paying attention to Mint, I often get asked how I measure net worth.
The simple answer is that I don’t. I obviously have a pretty good estimation, but I am not interested in the day-to-day gyrations. The more complex answer is that I focus on qualitative and less on quantitative measures.
Time
If you ask me how I measure my net worth, I answer in seconds, minutes and hours. Time is one of the major ways in which I flaunt my wealth. I have an exceedingly high net worth. It has nothing to do with wages or savings. It’s all about free time.
After reading my blog and learning about my life, I often get asked how I fit it all in. But the truth is, I generally feel like I have an abundance of time during the week. In fact, on most days I spend hours on me time. Not even including work, this is how I spend my day:
- 1-2 hours pleasure reading
- 1-2 hours walking/working out
- 1 hour writing
- 2 hours television
I get home from work on most days before 2pm. I am usually around when the kids arrive from school, and we always eat dinner together as a family.
If the old saying that money is time is true, than I am truly rich.
The No factor
How do I measure net worth? I measure it in no’s. The more often I get to say no to activities that I despise, the more wealthy I am.
Do you want to take on these extra responsibilities at work? um no.
Do you want to go to that Friday night client meeting? Nope.
How about that mandatory team building weekend? Sorry.
If you find that you can comfortably say no to the barrage of questions, requests, and usurpations of your time, than you have riches beyond your dreams.
Control
Ultimately it comes down to control as a factor in how I measure net worth. Whether controlling your time, ability to say no, or the other thousand inconveniences of modern-day life. No matter how much cash you have in the bank, if you are a slave to a job, or bound to keeping up with the Joneses, you are truly poor.
Final Thoughts
I have plenty of money. But money is not how I measure net worth. My form of wealth is the freedom to control how I spend my time. The richness of saying no as often as necessary to avoid onerous activities. And finally the control and power to feel a sense of ownership in daily life.
Therefore, I have stopped looking at the numbers. Although I bend towards frugality, I rarely pay attention to budgets. My Personal Capital and Mint accounts are all flashing warning signs that they need to be updated.
And I couldn’t be happier.
You’ve come up with a great balance of work and pleasure time ! Great example how you can do work that you love doing and still have a life. And the best bonus, you get to be there for your family, especially your kids and see them grow up! Which is definitely a great wealth, that’s often undervalued!
Family time is definitely one of the best benefits of FI.
We should design a new app … Personal Independence. Your net worth based on your calendar rather than you bank accounts.
Wow. I like that!
That sounds like a fantastic idea. And I see what you did there.
You should create the app, have all the PF bloggers affiliate market it (a la Personal Capital), then reap the potential passive income benefits!
And I’ll be rich. Rich!
Great post. At its core financial independence is all about the power to make your own choices. That’s what people find so attractive. It should never really be about the money, but rather about the freedom that money provides.
-Ray
Money comes and goes. Stocks go up and down. Your net worth, however, c an be a constant.
This is a refreshingly different perspective on net worth, and I love it. Our time is the most priceless and most valuable thing that we have. It is what we do with our time and how much good we can do in the world that determines our personal worth to society.
Time is definitely our wealth. Poverty is a lack thereof.
It’s nice to have choices. I’m loving mine.
Dr. Cory S. Fawcett
Prescription for Financial Success
You are a great model for good choices!
You are truly rich Doc G. The new paradigm of wealth- money and time! I love it.
I’ve been trying to shift my own internal paradigms about what wealth really looks like.
This post basically boils down everything to what is important, time and the ability to choose your path without financial burdens making that decision for you. My net worth hasn’t gotten to the point where I can fully say no to everything and tailor a time schedule that I would love to have (my motto is last to arrive, first to leave 🙂 ), but that’s the dream.
You will get there faster than you think.
I love the idea, the only problem is that we are all running a negative balance in our time budget and the clock will run out. I have plenty of money too but sometimes I wish I had a few more years in an account somewhere. We can control how we spend time but there is scant little we can do to keep it from slipping through our fingers. Even being up before 5am this morning pounding out five hard and hot road miles with my wife and friends probably will do nothing to increase the hours in my emergency fund.
Very true. Our amount of time is static. You are a great example of teaching when it time to call it quits and start embracing this scarce resource.
I love the net-worth measured in “no”. It’s so true. I recently learned the power of “no” and it’s amazing.
I get a lot of mileage out of “no” nowadays.