Here's how to calculate your financial report card.

How do you know if you’re financially successful? Is it defined by the kind of lifestyle you lead? Do you drive a nice car? Live in a nice house? Do you have a 6-figure income? Is it the way you compare yourself to others around you?

How do you know if your self-esteem is internal or external? Do you rely on others to tell you whether or not you’re doing a good job? Do you have criteria by which you measure whether or not you are successful? How do you know when you’ve made it?

Self-esteem and wealth are closely tied together, and we can have a chicken and egg conversation, but I can tell you that it’s really hard to hang on to your money when you are judging yourself against the standards of others. Especially when most of these others don’t already have what you want. If you wanted to know how much money it costs to take care of a dog, you wouldn’t ask someone who has only had cats. The same goes with finances. Don’t take money advice from people that don’t have any money.

The great illusion is that a lot of people pretend to have money and there’s really no good way for you to know the difference between those who have money and those who have a lot of nice stuff but are up to their eyeballs in debt. So, the moral of this story is to challenge yourself to become more internal. Don’t worry about other people because you might be looking at something that’s not real. The only time you know what’s real and what isn’t, is when you’re looking at yourself. It goes against your default settings to tune out what other people think, but you can re-script the way you’ve been taught to think about money. You can re-script the way you’ve been talk to think about self-esteem. You can start living life on your terms.

The true measure of wealth is your net worth. This is simply your assets minus your debts or, what you own minus what you owe. A person might make $150,000 a year, but if they don’t keep any of it, it doesn’t count. A person might have $50,000 in a 4019(k) but if they have $90,000 in student loans, they’re still in poor shape. Here is a chart of the average net worth in America.

Median NET WORTH from US Census Survey 2011 (done every 10 years, next will be 2021)

Quintile Net Worth

Bottom 20% -$6,029

Next 20% $7,263

Middle 20% $68,828

Next 20% $205,985

Top 20% $630,754

Do you know your net worth? Does it align with your visions of your future self? I give you the above chart NOT to have you compare yourself with it, but to show you that more than half of the people in this country are not where they’d like to be in accordance with their future goals. Successful people find a balance between their current needs & wants and their desired future. A good rule of thumb for being on track with your net worth is to multiply your age times your pretax annual income and divide that by 10.

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