We often see the net worth of businesses, celebrities, CEOs and politicians associated with rather substantial numbers. The term sounds impressive and desirable, but what does ???net worth?? actually mean? What is Net Worth? Net worth describes the dollar value of your assets. Simply put, if you own four houses each valued at $1 million, and have no liabilities, you have a net worth of $4 million. The same idea applies in business. Subtract your total liabilities from your total assets, and you have the net worth of your business. But what does that big, exciting number signify? The truth is that a high net worth doesn??t necessarily mean anything in the real world. In fact, when your money is tied up in investments that don??t generate a passive income to support your lifestyle, you can have a very high net worth, while not having money for weekly groceries. Shifting Your Focus What most people want is Financial Freedom--the opportunity to make decisions for their lives without having to factor in money concerns. That??s what drives most of us to start our own businesses in the first place. Sound great, right? But how do you get there? First, stop focusing on what your worth is on paper and start structuring your personal finances so you can invest for income. You probably took on personal debt to get your business started, and if you never properly separated your home and business accounts, you'll need to first remedy that situation. As small business owners, blurring the lines between private and business finance is an easy trap to fall into. Always remember that financially, you are not your business, and your business is not you. Choose Freedom! Dr. Tony
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