Comments on: Is Net Worth Really The Best Measure Of Wealth? http://amateurassetallocator.com/2008/09/22/is-net-worth-really-the-best-measure-of-wealth/ Amateur Asset Allocator Tue, 16 Mar 2010 01:43:13 +0000 http://wordpress.org/?v=2.9 hourly 1 By: joseph http://amateurassetallocator.com/2008/09/22/is-net-worth-really-the-best-measure-of-wealth/comment-page-1/#comment-7729 joseph Sat, 13 Mar 2010 08:43:50 +0000 http://amateurassetallocator.com/?p=289#comment-7729 I agree with much of what was said here. thanks I agree with much of what was said here. thanks

]]> By: Weekend Reading: September 28, 2008 : Moolanomy http://amateurassetallocator.com/2008/09/22/is-net-worth-really-the-best-measure-of-wealth/comment-page-1/#comment-2718 Weekend Reading: September 28, 2008 : Moolanomy Fri, 26 Dec 2008 05:00:15 +0000 http://amateurassetallocator.com/?p=289#comment-2718 [...] Is Net Worth Really The Best Measure Of Wealth? at Amateur Asset Allocator – The author believes that net worth is a seriously flawed metric.  I am not sure if I agree fully with the assessment. [...] [...] Is Net Worth Really The Best Measure Of Wealth? at Amateur Asset Allocator – The author believes that net worth is a seriously flawed metric.  I am not sure if I agree fully with the assessment. [...]

]]> By: Weekend Reading: September 28, 2008 | TheOnlyDevice.com http://amateurassetallocator.com/2008/09/22/is-net-worth-really-the-best-measure-of-wealth/comment-page-1/#comment-2010 Weekend Reading: September 28, 2008 | TheOnlyDevice.com Thu, 09 Oct 2008 17:37:49 +0000 http://amateurassetallocator.com/?p=289#comment-2010 [...] Is Net Worth Really The Best Measure Of Wealth? at Amateur Asset Allocator – The author believes that net worth is a seriously flawed metric.  I am not sure if I agree fully with the assessment. [...] [...] Is Net Worth Really The Best Measure Of Wealth? at Amateur Asset Allocator – The author believes that net worth is a seriously flawed metric.  I am not sure if I agree fully with the assessment. [...]

]]> By: Pinyo http://amateurassetallocator.com/2008/09/22/is-net-worth-really-the-best-measure-of-wealth/comment-page-1/#comment-1951 Pinyo Wed, 24 Sep 2008 14:13:35 +0000 http://amateurassetallocator.com/?p=289#comment-1951 While I agree that net investable asset is better than net worth, I agree with what Sean said. There's a lot of metrics that we can use and they are not better or worse -- they just do different things. While I agree that net investable asset is better than net worth, I agree with what Sean said. There’s a lot of metrics that we can use and they are not better or worse — they just do different things.

]]> By: Curt http://amateurassetallocator.com/2008/09/22/is-net-worth-really-the-best-measure-of-wealth/comment-page-1/#comment-1924 Curt Mon, 22 Sep 2008 14:35:33 +0000 http://amateurassetallocator.com/?p=289#comment-1924 I have to agree with Sean on this one. If your cash flow is interrupted, then you need a high net worth to get by while you regain your cash flow. If you lose your job, without any savings you are in much more trouble then if you have a savings to live on while you find another job. I think you need both Net worth and cash flow to measure wealth. Your cash flow needs to be higher then your expences to show a growing net worth for a long period of time. That is a true sign of wealth. I have to agree with Sean on this one. If your cash flow is interrupted, then you need a high net worth to get by while you regain your cash flow. If you lose your job, without any savings you are in much more trouble then if you have a savings to live on while you find another job. I think you need both Net worth and cash flow to measure wealth. Your cash flow needs to be higher then your expences to show a growing net worth for a long period of time. That is a true sign of wealth.

]]> By: Mr. ToughMoneyLove http://amateurassetallocator.com/2008/09/22/is-net-worth-really-the-best-measure-of-wealth/comment-page-1/#comment-1923 Mr. ToughMoneyLove Mon, 22 Sep 2008 14:25:14 +0000 http://amateurassetallocator.com/?p=289#comment-1923 "Cash flow is the only true measure of wealth"?You are going to have explain to me how a high positive cash flow accompanied by a declining net worth is a sign of wealth. Net worth is a number, not an asset class. Assets can be moved from one class to another to generate income as long as they have some liquidity. Someone with a net worth of $2 million can invest it to generate more cash than someone with a net worth of $1 million. Lots of people have high cash flow from earned income but that is no sign of wealth either. I think what you intend to mean by "cash flow" is actually ROI which is a valid metric but you need a big "I" before you can get a big "RO". “Cash flow is the only true measure of wealth”?You are going to have explain to me how a high positive cash flow accompanied by a declining net worth is a sign of wealth. Net worth is a number, not an asset class. Assets can be moved from one class to another to generate income as long as they have some liquidity. Someone with a net worth of $2 million can invest it to generate more cash than someone with a net worth of $1 million. Lots of people have high cash flow from earned income but that is no sign of wealth either.

I think what you intend to mean by “cash flow” is actually ROI which is a valid metric but you need a big “I” before you can get a big “RO”.

]]> By: Sean http://amateurassetallocator.com/2008/09/22/is-net-worth-really-the-best-measure-of-wealth/comment-page-1/#comment-1921 Sean Mon, 22 Sep 2008 12:09:05 +0000 http://amateurassetallocator.com/?p=289#comment-1921 Hmm... I'd say there are many tools for the job, like there are many controls for an airline pilot. When they are lifting off, they do not need to measure altitude. When they are landing, they are not obsessed with fuel levels. Yet while they are in the air, they need the tools for measuring speed, altitude, fuel, location, etc. I'd say any individual financial measure has shortcomings, even cash flow. If the cash flow is disrupted, I'd rather have a positive net worth than a negative net worth. Cash flow by itself also says little about the potential for diversification. Not to say it is inadequate or even less than the best, but I would not frame the debate in terms of looking for the perfect hammer. good post, tho' Hmm… I’d say there are many tools for the job, like there are many controls for an airline pilot. When they are lifting off, they do not need to measure altitude. When they are landing, they are not obsessed with fuel levels. Yet while they are in the air, they need the tools for measuring speed, altitude, fuel, location, etc. I’d say any individual financial measure has shortcomings, even cash flow. If the cash flow is disrupted, I’d rather have a positive net worth than a negative net worth. Cash flow by itself also says little about the potential for diversification. Not to say it is inadequate or even less than the best, but I would not frame the debate in terms of looking for the perfect hammer. good post, tho’

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