Your Salary is Not Your Net Worth

June 17, 2014

Connect Member

Financial Analyst & Divorce Strategist. Motivator of women to become the CFO of their lives!

It’s tempting to fixate on the dollar amount of your paycheck. But the fact is: What matters far more is what you do with those dollars — and what you allow those dollars to do for you over time. True financial freedom doesn’t happen until you’ve put your money to work for you.

It’s not just about increasing your salary but about applying some of that salary to building your net worth. By definition, net worth equals your assets minus your liabilities. Simply put: It is what you own minus what you owe. (I believe Benjamin Franklin described it best when he said, “Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones.”)

According to, approximately 75 percent of Americans are living paycheck to paycheck with little to no emergency fund. Not only are they walking a fine line between financial ruin and survival, they are also creating a self-fulfilling prophecy that will have them working until their very last breath.

It doesn’t have to be this way. 

Rather than bore you with mathematical formulas or fancy financial lingo, let me just say this: if you do your part your money will work harder — for you — than you ever imagined. It’s as simple as putting down your credit card and saying “no” to the temptation of an extra shopping trip to Target, one too many nights out with friends, or a shoe binge at Nordstrom’s. (I confess, I too like Jimmy Choo!) Even with as little as $3.50 per day, $25 per week or $100 per month in your budget, you can create wealth.

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