Year end is a good time to reflect on how you and your family are progressing towards your goals.
It is relatively easy to evaluate financial performance by looking at an income/expense statement and changes in assets and liabilities. Other measureable goals, such as acquiring additional education, losing weight or making home improvements are also relatively easy to evaluate.
Measuring personal worth is subjective at best, but we do know it when we see it. Think of people in your family that aid and comfort other family members in times of need. Think of people in your city, such as ministers, educators and leaders that add personal value to the community. Think about people with like Mother Teresa, Bishop Tutu and Martin Luther King. All of them ranked low on financial net worth, but extremely high in personal worth.
Net worth vs. personal worth
An individual’s financial net worth is the difference between their assets and liabilities. An individual’s personal worth is their sense of their own value or worth as a person. Personal worth can be determined by an individual’s personal contribution to their immediate family and friends, their contribution to the community at large and their contribution in the workplace. What is your personal worth? Do your contributions outweigh your liabilities? How will you increase your personal worth in the New Year?
Taxes vs. charity
The payment of taxes is a legal requirement, although individuals have the right to take advantage of legitimate methods to reduce their tax burden. Winston Churchill once said, “We make a living by what we get, but we make a life by what we give.” People give to charities for a variety of reason – religious, preservation, health issues, cultural, freedom, etc. In many cases, our charity recognizes that there are people less fortunate than we are. The act of charity can be viewed as both counting our blessings and social responsibility. What charities or causes are important to you? How much will you give of your time, talent and treasure in the New Year?
Estate vs. legacy
An individual’s estate includes all of their assets. This includes investments, business interests and personal assets. It is relatively easy to pass your estate to your descendants. You write a will, perhaps set up a trust and specify how you would like your estate distributed. A personal legacy includes lessons, principles and insights you can offer about achieving personal and professional success. It is the summary of your life’s accomplishments and gives your descendants and future generations a foundation to build on. How have you shared your legacy with your heirs? How many times this year have you sat down with the younger generation and shared your successes and failures? How will you share your legacy this holiday season and in the future?
We each possess an incredible force and privilege – our own free will. We have the right and responsibility to choose a response to life’s challenges and opportunities. This holiday season, let’s be thankful for the gift of life that we have been given and be ever mindful of the opportunity we have to improve our personal worth. The secret to a rich life is to have a passion for living, strong relationships with others and to be at peace with one’s self. Happy holidays!
Michael G. Shinn, CFP, Registered Representative of securities and investment advisory services offered through Financial Network Investment Corporation, member SIPC. Visit www.shinnfinancial.com for more information or to send your comments or questions to email@example.com. © Michael G. Shinn 2009.