I can't believe how many people talk about net worth like it means everything when it comes to money. Elon Musk said it himself in an interview some time back that it's just shares and he doesn't really have that kind of cash sitting around in a bank.
When you really think about it, net worth doesn't mean anything about what kind of life you live.
I mean even if you have a whole bunch of equity in your house, you're not eating off of that unless you sell that house and move. So there is a tremendous amount of your net worth just sitting there and will simply sit there until you sell your home. You might have a gigantic net worth on paper, but at the end of each month, you could be completely broke. And worse yet you may stay in a job that you absolutely hate because you need that income to keep drained your gross pay.
The only true measure of value, if I'm asked is your cash flow and how sure or guaranteed it is to keep the flowing to your account. Do you have enough coming in to cover what you need and want? Are you able to go on vacation and not panic? Can you be sick and stay away from working for a long time and not worry about money? That's the real freedom and that's the type of mony that actually makes life easier.
Having a big balance in your bank account doesn't do you any good if you are stressed out or have no time to use that balance. really, I could be wrong or off with technicalities of net worth but fact is fact, cash pays for stuff in the end.
Some people feel very good to know that there is a big balance and they don't really use it. But for the most part, I would say that it's about having a great life in the now and not just having assets that look good on paper. If your money doesn't help you make your everyday payments easier, what is the purpose of it?
I just feel like everybody has been measuring the wrong thing from the beginning. Some do understand it but you would be surprised that when some hear of billions with tens of billions in stocks and shares, they don't understand enough to know it's not money that can be used like normal cash.
