Why You Shouldn’t Focus on Net Worth

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Net worth seems to be the focus of many people. From the FIRE community to magazines spilling the bankroll of top-tier entrepreneurs, the world goes crazy for high net worth individuals. But, net worth isn’t everything. In fact, net worth has nearly zero bearing except as a milestone when it comes to any wealth building at all. Wealth isn’t really a number, it isn’t how much money you have, it’s how well you know how to create value.

Dynasties grow their wealth by leveraging their 4 types of capital, and in doing so are able to provide value and grow their resource no matter what the circumstance.

Value attracts money, opportunity and builds income. With value in mind, your net worth could disappear overnight and you’d still be able to provide for yourself and your family. You might get really great at your job, or awesome at building a business, maybe you build a high-end client base for your freelancing side hustle. All of these skills are vastly more valuable than what your net worth is. Net worth is just a summary of what you have hoarded, not what you can do for the world. If your goal is to create a Dynasty and build generational wealth, you need to adopt this mindset shift.

The Problem

When net worth becomes your focus, suddenly you have a few problems form in your mind. These issues can impact your happiness and motivations, not to mention impact your greater goals.

1. Your net worth is a comparable figure. This means that it is a number which you can compare and rank to others. The number can always be higher, so it will never be enough. Comparison is the thief of joy, so if you’re forever comparing yourself to your friends, co-workers or a super-entrepreneur you’ll never feel great about where you’re at.

2. Your net worth is a figure that can fluctuate wildly if you’re invested in just about anything. If your main focus is an arbitrary number, be prepared to be upset if your favorite investment takes a nose dive.

3. If you only ever want your net worth on the rise, you’ll be too afraid to take swings into ventures of your own. Your net worth is a number calculated from the sum of quantifiable figures. So if you take say $50,000 and put it into a business, you’ll lose that off your number. If the business fails, it’s gone for good, sure. But if the business succeeds, you could make far far more than that annually. In 2019, I sunk 200k into a REIT portfolio and 30k into new business ventures. Because I wasn’t concerned with my net worth, I has less reservation in doing this.

4. You won’t be as willing to invest in yourself as this will be dipping into your net worth. A seminar, course or class that costs a few thousand may take 5% off of your net worth, and that just won’t do. Even though this educational opportunity may pay itself back 50 times over.

5. You’re more liable to sacrifice key expenditures that make all the difference. A cheaper car might seem a more appropriate purchase, but your vehicle of choice now consumes more fuel or isn’t as safe for your family. Maybe you’ll choose to live in a lower socioeconomic area, and then suddenly the schools your children have access too aren’t as good(although you should keep your kids out of socialist reeducation camps). Your dietary choices may suffer and you eat lower quality food, just to eek out that extra few dollars each month. Or you may skip out on a particular social gathering, missing making significant social connections for the benefit of a couple of hundred dollars


Net worth is a selfish approach to wealth. Paying pure attention to net worth means you’re only pursuing the goal of coveting a rather arbitrary number to yourself. Instead, you should be focused on providing and maximizing your value to the world. Value is what makes the world go around, and the more valuable you make yourself, the more wealth you will attract. So instead of focusing on growing your net worth each month, instead, ask how you can provide even more value to the world.

This may take the form of learning or honing a skill, investing into more advertising for your business, or becoming more efficient at your job. By building on these skills, you’ll attract more wealth into your life and increase your capacity to earn. When you have valuable skills, if you ever fall flat, you can always get back up again. Having $0 Networth and the ability to earn and provide is better than $1M and no knowledge of how to produce more.

If you’re working a job and only focused on accumulating wealth, you probably won’t be focused on approaching or creating other, more scalable opportunities for fear of missing out on the opportunity to build net worth.

Revenue Growth

Remember a job is really only a single source of revenue. Lose that, and your livelihood is gone. Multiple income streams are great, but diversifying is really only a good way to keep wealth, not create it.

The real way to build scalable income is to have a focused, scalable source, with multiple revenue sources within it. OR have a super high earning job where you have deeply entrenched yourself by elevating your value to be…invaluable.

A multi-faceted income source might mean an e-commerce store with several well researched and desired products, lots of traffic sources and a way to recapture and target customers. That way you’re building a bunch of revenue streams within a single venture and keeping focus. But if you were to sell out of one product, you aren’t losing all of your revenue. You’re providing a lot of value to a lot of people, and thus attracting income. But to start a venture of this caliber means you’ll need to take a hit to your net worth.

By taking risks and creating family assets like this, you also open pathways to the 3 family wealth creation methods as well.

When grow your revenue, you won’t be as inclined to focus on how much is coming in and growing your NW, but can instead focus on capital gains as you won’t need everything you do to be ‘cash flow positive’. When you compare capital gain growth vs income, the former more frequently wins out.

The Star Swear Jar

I think a lot of us have come across this concept by now. The jars the FIRE community have where they put a small object into it per every $x amount. It’s an interesting concept that gives a physical way of measuring progress. Every, item you drop in is representative of of a fixed amount.

Say it took you 6 months to save that $20k represented by 20 stars. BUT now, you want to start a business that requires $20k up front. There suddenly becomes a psychological barrier as you have to remove those 20 stars from the jar.

It pays to not have some physical manifestation of your hoarded stack as it creates a cringe-worthy barrier when you have to make a withdrawal. It might seem like a small thing, but it is very real.

Star Jar Net Worth

This image was surprisingly easy to find.

The Lottery

13. 58. 27. 43. 21. 08. “No.” 33. “Way.” 06. “JACKPOT!” Imagine this. You’ve been vigilantly ‘investing’ in the lottery for the past 20 years and finally, your numbers rock up. You’re the winner of $1M. That $20 of tickets every week have finally paid off and after tax and all the rest, you get $1,000,000 in hand. Forgetting savings, say your net worth jumped from $0 to $1M. Awesome. Now you can get the house of your dreams…there goes $600k. Gotta furnish it(not at IKEA)…$50k A nice car or two…$120k. Maybe a modest boat….100k. Take the family on a big holiday…$80k. Put some away for the kid’s educations…$100k. And some savings to ‘live’ on…wait.

If you were following along, you’d know you now only have $50,000 left of that $1,000,000. So much as for an early retirement. House upkeep will be $6-12k/year, a flash couple of cars will run up $30k a year. You still have to eat, you still have to pay for utilities. That $1,000,000 is GONE. Yeah sure, you may be left with a house, some cars, and a boat. Let’s say after the value is lost on the boat and cars You’ve got $750k. These are LIABILITIES. They cost you money to own. So you need revenue from elsewhere. I doubt you have the luck to win the lottery again(with a 1:200,000,000 chance) so maybe it’s time to put a halt on the lottery spending. The point is that you don’t know how to regenerate that wealth again the net worth you suddenly had meant nothing.

Fixing the Odds

Let’s suppose instead of investing all of your hope into the lottery, you instead put 20 years of time and effort into learning a high-income skill, or developing business, or building a real estate empire. Doing this gives you a great deal more control over the outcome of your situation. Suddenly, instead of relying on chance(a 1:200,000,000 chance at that), you’re taking matters into your own hands. With high earning jobs there are only so many positions, and to do truly well in real estate, you need significant capital to begin with. So let’s stick with business as an example, as this to me is the most approachable.

You spend 15 years building and losing businesses, all the while building a strong fundamental skill set. Then on year 16, you finally work out your perfect fit, and your business takes off. Your $35k a year job is suddenly shadowed by your $100k/year+ businesses. You keep putting work in over the next five years and build it to $250k a year. So now you’re at lottery inception. You could have had $1M and no skills, or $250k a year and a large set of skills. You can still have all the nice things, either by saving of loaning and still be able to service them. You’ve built something you love to do that provides for you and yours and…huh, you’re net worth is pretty low because you’ve just been rolling the funds over and over into your business.

I’m obviously a little biased, but would you rather have $250k/year business doing something you’re proud of, with the opportunity to help your family out for generations? Or would you rather a 1:200,000 chance of $1M and a $35k/year 9-5?


When it comes to handing over wealth, net worth is diluted whereas value is multiplied. Building the skills to create value and provide income is something you can pass onto your children so they can do the same. Following on from the business example, you could include your children in your family business and teaching them the skill that took you 20 years to accumulate. After a bit of time, they can then produce a similar income to that which you built in your business. If you were to take a $1M net worth, you’d be cutting up a house, gifting a car, or just handing over a chunk of cash, all of which are divisions of wealth.

To establish intergenerational wealth in your family requires a focus on value. Net worth is totally irrelevant. By teaching your children how to earn, you’ll be setting them up for life, rather than giving them a chunk of money and an immature financial sense.

Remember the financial capital your create for your family is used to improve the lives, not the lifestyles of the family members. It should help them improve themselves in both competency and creativity and create opportunities. Don’t let it become a shackle. And certainly don’t let the tax man rob your estate(which is largely based off net worth).

Intergenerational Wealth

Yoink, Pops


Fiat currency has no real value. It is based on debt and imagined numbers. It has bee this way for quite some time and theres no sign of it ever returning to being pegged by a relatively finite resource.

As such, fiat serves as a measure and temporary means of exchange only. It should be used to convert into assets that produce real resources and provide value to others. These real resources can be converted into more fiat to be exchanges for more assets, and the value is paid for in fiat, which again is used in turn for more assets.

Examples of assets that produce real resources are orchards, mines, real estate(as long as socialism isn’t present), crypto(arguably), land, commodities and other investments that produce or posess real things you can either buy outright or buy into via stocks or private equity.

Assets that produce value are quality services and businesses that produce real things. Think vital service businesses, and manufacturing businesses that fill a need in the market. Again you can start these yourself or buy into them via public exchanges or private equity.

Focusing on your net worth in fiat currency means you are focusing on arbitrary tokens of exchange. These tokens are backed by a system destined to fail as it quantitatively eases itself into oblivion. While the powers that be print more currency to fund their own deficits, while not creating or accomplishing anything real.

Passive Income

This is the holy grail of the PF and investing world. Everybody is chasing the ‘make money while you sleep’ dream. The only way to truly achieve this with relatively low risk is to have a large chunk of wealth in the first place. Nobody ever got rich with a savings account, or ETFs, and nobody rich ever focused on having a high net worth.

[bctt tweet=”Nobody ever got rich with a saving account.” username=”Dynastus”]

Once you know how to create value, only then should you focus on building passive income. If you’re able to save $1000 a month, you may be able to grow your income by $50/year each time you save and invest this amount via dividend investing. But if you increase your ability to provide value you can roll that $1000 into your main revenue source over and over until you could save $10,000 a week(or more). Then you can decide if it’s worth ‘diworseifying’ to try and preserve all the wealth you’re creating.

In short, passive income comes from investing the money you’ve made in other people or their ventures, so you can reap the benefits. The other way is by creating systems in your assets so they manage themselves, but that’s a post for another time.

Mindset Shift: Value>Net Worth

Instead of focusing on net worth, instead, you should be focusing on building a high-value skill and/or multifaceted assets. This will let you earn no matter what happens and grow those earnings as you grow your value. So even if all of your assets get taken away, you still have your skillset to create value for others.

This might come in the form of something like a trade skill, or the ability to sell, or making killer listings on sites like eBay. That said, net worth can be a fun thing to track as it is quantifiable, but it shouldn’t be a goal to increase this rather arbitrary number. If you spend your time figuring out how to grow your wealth, you’ll never be poor.

This isn’t to say you should keep a loose track of what resources you have at your disposal, and have an emergency fund reflective of that. But the barrier put up by constant monitoring of a truly arbitrary number will hold you back. Fiat currency is just a tool, an intermediary exchange to do what really matters – accumulate real resources and provide value to others.


Ben Signature

PS. Funnily enough, my Nana won the lottery. It took her NW from 0 to mid-six figures. It changed her life understandably. But it didn’t suddenly make her a superstar hot shot earner and she still needs to budget and spend precariously. And her family still dumped her in a rest home to live alone, surrounded by peopel she hates with infrequent visits form family. Don’t let this happen to you – your retirement plan should be having a family that loves you. Focus on human capital first when building your dynasty.

Don't Focus on Net Worth
Don't Focus on Net Worth

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