Personal Wealth and Worth

Asset rich, cash poor? Negative or positive equity? Our third tool, “Personal Wealth and Worth”, is a window to our wealth and its value. We assess whether our debt is weighing heavily on our wealth and assets; whether we are on the right track in achieving financial independence, and what changes need to be made to ensure all is aligned.

It is an exercise to assess if debt is more expensive than our assets. A practice to review, rebalance and realign the assets that determine our wealth versus short term or long-term goals.


When doing the exercise, some key considerations could come forward:

• A plan to pay off expensive debt

• The percentage of liquid (cash or investments in stocks) vs illiquid assets (real estate, art, all which take time to divest)

• Selling some low yield or low value assets to re-invest in new ones

• Designing a new wealth strategy and setting new goals based on your short- and long-term horizon

• Ensure that the balance lies in positive not negative equity value. The value of assets minus the total liabilities = equity (negative equity if debt costs more than the value of assets/positive equity if assets are worth more than liabilities).


The starting point would be an independent valuation of assets, especially real estate and art or other collections of assets such as wine, watches, and jewelry, among others. Add assets that allow you to create or generate wealth (education) and the projected value of your pension plan.


There may be points in life where we are cash poor, meaning no liquidity, but we are asset rich (wealth is tied up in assets that are illiquid, that is if we need cash tomorrow it is hard to sell, to pay off expensive debt and to reinvest).


There is a good saying that one needs to sell assets at a time when there is no need to sell them. In this way our negotiating power is stronger, rather than selling an asset when we urgently need cash, and our negotiating power is limited as we are pressed by time or other priorities.

Independent valuations are good to repeat every 3-5 years as markets evolve and situations change.

This is an enlightening exercise that opens opportunities for our financial independence.