Smart Money Challenge with Tosin Dada

Day 2: Calculate Your Net Worth

Today is Week 1: Day 2  Smart Money 30 challenge.

Financial task: Calculate your Net worth
Your Financial Task today is to calculate your Net worth. Take stock of your assets and liabilities. Assets are any resources you have of value and liabilities are basically what you owe. Your Net worth is your total Assets minus your total liabilities.

Why is this important?
We often make the mistake of measuring our financial success based on how much we earn as opposed to how much we are able
to keep. When we discuss wealthy people like Dangote, we talk about their net worth but when we talk about our own level of financial success, we talk about how much we are able to spend.
As a society we measure financial success based on a person’s spending patterns …‘Soji is a big boy he drives a range’, ‘Nneka is a big girl she travels to Dubai and carries designer bags’. However, our metrics are faulty. The true measure of sustainable wealth is how much of our income we are able to convert to assets that can provide us with an income. Building wealth is more about how much you keep, not about how much you spend. If you make N100m and you spend N100m, what you have left is zero.
Ideally, the goal is to get to a point where the assets you’ve accumulated can pay you enough of an income to pay for your lifestyle. For example, rental income from a property you own can buy you a car or a holiday to the South of France. Or the dividend checks from your stock portfolio.

How to rock this task.
Make a list of everything you own of value.( Stocks, Property, land, fixed deposits, cash, gold).
Make a list of everything you owe. (Mortgage, car loan, general ‘gbese’)
Subtract your total assets from your total liabilities. Don’t be ashamed or afraid of the number.
Calculating your net worth now will let you know your starting point.
The figure is not as important as the trends in network…. As long as you make a commitment to keep growing it, you’ll be fine.
Another useful tool for this challenge is The smart money journal. There's a section to calculate your net worth. The journal can serve as a workbook for the 30- day challenge. (It's not compulsory but its
helpful)


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