Many people dream about reaching the million-dollar net worth milestone, as if that lofty benchmark somehow guarantees a strife-free financial life. Preposterous! Net worth — the value of your total assets minus your total liabilities — is overrated because it’s very misleading, as evidenced by many “paper millionaires” who struggle to make ends meet. Yes, net worth is a terrific indicator for estate planning, or identifying how much insurance you need to cover your assets, but it only provides a partial snapshot of your present financial situation.
The bottom line: Your ultimate goal should be financial freedom — and that requires minimal net worth.
Photo Credit: kennethgray