Martha Myron

Our net worth entails much more than money

  • Net worth component: your education, knowledge and skills are assets that should be considered part of your net worth

In November for a number of years, I have written about being grateful as this season always seems to be the time for reflection on who we were as a community, who we are now, what we have, where we are going, and what we hope to achieve in our individual lives.

Possibly, this is influenced by the American tradition of Thanksgiving spilling over into the Bermuda consciousness, but we also each year have solemnly paused to remember again with great gratitude (and sadness) those brave men and women who sacrificed their lives for us, for individual and country freedoms.

This year, I propose that we simply have gratitude for what we have. The fact that every single one of us has a personal net worth filled with the unlimited potential of intellectual capital. We just have to use it to the fullest!

Many of you taking this statement on its face value will not only be sceptics, but won’t believe a word. That is just fine; it is my job to persuade you otherwise.

Why is this so and what is personal net worth really?

The words net worth are never assumed to apply to ordinary folks. Young careerists, starting out, feel they have no net worth. This is not true, but perception is a powerful persuader.

Perhaps, because this description is flogged endlessly by the finance industry as in high-net-worth individuals with the implication being that these folks have plenty of money, and excess to spare.

Their personal financial net worth statements are typically displayed in a detailed spreadsheet, listing all of their assets, but there is so much more to the equation, the intangible quality of human capital.

An individual’s personal net worth is defined as the value of the individual’s assets (what one owns) minus liabilities (what one owes) such as retirement accounts, other investments, home(s), and vehicles. Liabilities include debts, eg a home mortgage, vehicle loan, credit card consumer debt and personal loans.

The word asset is derived from the French word, assez, meaning enough. Further translated, asset means an item of value, or plenty. Synonyms for an asset are benefit, advantage, quality, skill, talent, ability, or a positive feature, according to Webster’s dictionary. So many interpretations from the one tiny word asset and none of them referring to financial acquisitions!

One intangible asset, the greatest of all, is almost never listed, yet from that personal asset almost all financial successes and acquired assets are generated.

While the word asset is synonymous with appreciation in value, many acquired assets never realise a potential profit even though we think that they should.

Think about the following items often thought of as assets — starting with the obvious choices: clothes, fabulous shoes, jewellery, cars, electronic toys, property, investments, intellectual capacity.

Which of these assets will appreciate consistently — over the years?

Only one — your intellectual capacity, your human capital, your brainpower! You are your biggest asset! And it does not cost you anything, you can use it freely, any time you want.

Net worth is not about money and assets — but potential.

We all have potential, with the youngest among us having the greatest potential to ultimately use their highly polished intellect for themselves and the good of the community as they learn to earn, progressing their way across the stars.

So, does it not follow that the first place to invest is, in yourself by upgrading your education, by upgrading your job skills — never stopping the process of learning and acquiring knowledge?

Yet, this is not what we think to do first. We experience a lack of self-confidence in a job, or a family relationship. We all — and I among you — fall in the “good” trap. We buy things because they make us feel good, and look good, if only temporarily.

I’ve never understood why the human capital intangible assets, such as educational degrees, are not factored into a net worth statement, when intellectual acumen contributes almost everything to one’s overall financial position.

As we move rapidly on into the 21st century, it is universally recognised that human capital is vital to the success of the individual, industries, communities and nations.

New business opportunities in blockchain and cryptocurrencies

Last week, David Burt, the Premier, and Wayne Caines, the National Security Minister, and the Bermuda Government announced the formation of a task force comprising two teams to advance Bermuda’s regulatory environment as a destination for utility tokens, tokenised securities, cryptocurrencies, and coin offerings.

Premier Burt said a regulatory framework for distributed ledger technologies would become operational in early 2018. The framework would regulate the activities of firms operating in or from Bermuda that use DLT to store or transmit value belonging to others, such as virtual currency exchanges, coins and securitised tokens.

Economies grow on disruptive changes. Those who embrace the future, stay attuned to changes, learn about them, use them to personal and community advantage — always have a chance for success. So the challenge is for us all is to use our greatest asset, our intellectual capital to our greatest benefit — the opportunities are always there.

Sources

The Royal Gazette, November 22, 2017 ( http://goo.gl/raeM7j )

E-Book: Blockchain for Dummies ( https://goo.gl/9JMVem )

Martha Harris Myron CPA JSM: Masters of Law, International Tax and Financial Services. Pondstraddler Life™ financial perspectives for Bermuda islanders with multinational families and international connections on the Great Atlantic Pond.

Contact: martha.myron@gmail.com