Which is Better $1 Million in Revenue or $1 Million in Net Worth?Apr 06, 2023
I hear a lot from my clients about the revenue goals that they want to achieve in their businesses but what I don’t often hear is clients talking about their net worth and so today I want to discuss an exciting topic that many business owners tend to overlook: the importance of building your personal net worth over revenue.
What is net worth, you may ask? Simply put, it is a measure of an individual's financial position that is calculated by subtracting liabilities from assets. In other words, net worth represents the difference between what you own (assets) and what you owe (liabilities). Assets can include real estate, investments, savings, retirement accounts, and other valuable possessions, while liabilities encompass debts such as mortgages, loans, revolving credit card balances, and other financial obligations. It is a useful tool for measuring and growing wealth.
As an expert in finance, I have helped business owners take control of their finances and build their net worth, even with a six-figure business. Many small businesses focus solely on revenue, but as I have seen firsthand, having a seven-figure revenue with no profit is pointless. You're essentially working for free and burning yourself out in the process. Instead, I encourage you to think about what you can do with the money you have now and how you can build your net worth through passive income, equity, and other avenues.
As an business owner, it's easy to get caught up in branding yourself and making your business all about you. However, this can be detrimental in the long run, as it creates a business that is only valuable if you stay in it. If you're building a business with the goal of eventually selling it, then it's essential to focus on creating value beyond just your personal brand.
Building your net worth doesn't have to be complicated, and you actually don't need a seven-figure revenue to achieve it. In fact, I grew my net worth to 7 figures with only recently hitting multi-six-figures in my business. It's all about focusing on the full picture, growing your business revenue, while also building your net worth.
Passive income is a crucial element to building your net worth. When you create passive income streams, you're creating income that doesn't require active work. This means that even if your business takes a hit, you still have income to fall back on, which is crucial for long-term financial stability.
It’s vital that your wealth goals not only focus on on growing your business but also on building your net worth. Make it a priority to look at the numbers, both your personal finances, and your business finances to make them work for you to grow your net worth. With the right tactics and strategies, it's possible to build a business that not only supports you and your family now but also in the future.
Not sure the numbers you should be focusing on or how much money you need to reach your goals? I’ve created a FREE wealth building bundle which includes 3 custom calculators that help you get clear on your finances and provide a clear roadmap for your success.
The bundle includes:
- The Wealth Builder Calculator that will help you get started on your journey to financial freedom by showing you your current net worth. It's the perfect tool for those just starting out, or those who are seasoned investors looking for a way to grow their wealth. With this calculator, you'll be able to focus on the right areas to grow your wealth with confidence.
- The Wealth Winning Calculator will show you the benefits of investing in mutual funds versus paying more on your mortgage or other loans. You'll be amazed at how much faster your wealth can grow by investing in mutual funds. Imagine the freedom that comes with having more money to invest in your future, rather than just throwing it at your mortgage.
- The Investment Inspiration Calculator makes it easy to know how much to save monthly to reach your goals and how long it will take. You'll be inspired as you watch your savings grow, knowing you're on track to make your dreams a reality.
Revenue is important, but building your net worth is equally important. Don't make the mistake of focusing solely on revenue and burning yourself out. Instead, take control of your finances, create passive income streams, and build a business that supports you in the long run. If you're ready to take control of your finances and build your net worth, reach out to me today. I'd be thrilled to chat with you and see how we can work together to achieve your financial goals.
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