What does your NetWorth show?
Katie over at Aridni has a very interesting post today on Financial Bloggers losing focus. What? You don’t read Aridni? You should. Seriously.
Katie makes a some very good points.
Instead of counting the fluctuating pennies in our Coca Cola stocks, we should, as financial bloggers, be looking for a way to make investments toward the future. The greatest investments cannot be calculated TODAY—owning a successful and growing business, owning a home that’s in an under-valued market, buying stock in an undiscovered beast like WalMart in 1995, etc. But when you cash in on those investments in forty years at retirement, prepare for the specific $ sign in your net worth to leap upward. Some of that money exists TODAY, yet you cannot show it on a net worth statement. Well I guess you could spend $400 to get your property reappraised every month. Think that’s silly? Not if you’re counting your net worth to the penny—might as well be accurate.
But, I think it’s off the mark just a tiche. I don’t post my Net worth here. I don’t do it for the reasons that Katie mentions, but instead because I see it as a private thing that the friends I have that read this blog don’t need to know.
Where I think that Katie missed her target is that a net worth statement is supposed to not include future $. It is supposed to be a view of your worth as of this moment. It cannot always be completely accurate and some guesstimates must be made.
What I think Katie meant to say is that the Financial bloggers are spending way too much time and effort on the here and now with their net worth statements instead of looking to the future and finding new ways to make that net worth statement double, triple, or more. What brilliant new investments are there? What great savings methods can be combined to make your money multiply? I think she meant to say stop focusing on the here and now and start looking to the future.
Sure, your net worth is a part of your future and the better it looks, the better you may be when the future rolls around, but it is nothing more than a tracking mechanism for the success (or failure) of the financial steps you are making. Lets talk about those steps…
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Katie said,
Wrote on August 22, 2006 @ 10:10 pm
Thanks for the summary of my words! Such wisdom
thatedeguy said,
Wrote on August 22, 2006 @ 10:21 pm
Not so sure it qualifies as a “summary”, katie, but thanks for spurring the gears for me. You guys and gals at Aridni always seem to do that.