Financial Foundations



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A Closer Look at "Net Worth"

What is your net worth? 

I hate this question.Expressions like this one can inadvertently diminish human dignity.

Every industry has its own lingo and jargon. Many terms are of no real consequence, but sometimes a particular expression can be misleading and even harmful.In the financial planning industry, the term "net worth" is a prime example of a poor choice of words-- which in this case is used to identify a person's financial resources or net equity. This calculation is made when a person applies for credit or makes a non-guaranteed investment.

If you added all your assets (bank balances, cash on hand, value of home, car, furniture, RRSPs, investments) and then subtracted all your liabilities (mortgage, credit card balances, loans, personal lines of credit), this numeric total would be called your net worth.

For some, this can total hundreds of thousands or even billions of dollars. For others, their net worth may be zero or even a negative value. High net worth individuals are rich and low net worth people are poor.

The proper accounting expression for net worth is net equity. This is technically more accurate but not as commonly used.

People, created in the image of God almighty with an indestructible soul, should never have their worth equated to a commodity as mundane as mere money. Although net worth is widely recognized, my contention is that sloppy terminology leads to sloppy thinking. Have you ever considered, "What was Jesus' net worth?" Using this measure, Jesus' net worth was about zero. After all, at the time of His death, His only worldly assets were the clothes on His back.

But it's ridiculous to say that Jesus was worth nothing. He changed the world more than anyone else in history. He purchased back from Satan the entire human race. Christians are redeemed by the blood of Christ, which is more precious than all the gold and silver (1 Peter 1:18-19).  There is no way whatsoever that the term "net worth" can be used to identify the worth of an individual.
Each one of us is priceless in the eyes of God, because He died for everyone, making each of us infinite in value. By saying John Smith is worth $50 million, while Peter Brown is worth $500, or even worse, has a negative net worth, we tie their dignity to their financial resources. How degrading!

People, created in the image of God almighty with an indestructible soul, should never have their worth equated to a commodity as mundane as mere money. I'm glad that God doesn't think this way--not even for a split second.

If God does use a tool to measure a person's worth, then it's based on their attitude of humility and the attention they pay to the Bible.

Isaiah 66:2 reads, "'For My hand made all these things, thus all these things came into being,' declares the Lord. 'But to this one I will look, to him who is humble and contrite of spirit, and who trembles at My word.' "An excellent example is found in Daniel 10:11, where Daniel is called a man of "high esteem" or "preciousness."

Let's remember that the inherent worth of individuals is not measured by their earning power or by their assets. It is also not measured by their education or public influence. The true indicator of worth is their closeness to God. That's why King George II of England once said that he feared the prayers of John Wesley more than the Spanish armada.

So if someone asks you what you are worth, say that you are priceless. Maybe we can slowly reform some sloppy thinking to break the line between personal dignity and financial resources.

In my practice I use the term "financial resources" rather than "net worth." I also like the slogan that a friend of mine, Bruce Koss, uses in his professional accounting practice-- "Money matters, but people count."

Reprinted with permission from the City Light News, Calgary Alberta, Canada.