Brian Tracy presents a short motivational lesson on determining and growing personal net worth. He defines net worth by what you could realistically convert to cash (a 'garage sale' test), recommends setting five-year targets and aiming for roughly 10–20% net-worth growth per year, and emphasizes that the essential first step is deciding to become financially independent.
Let's talk about net worth. What is your net worth today? What net worth do you want to have in upcoming years? So start off with your current net worth. How much are you worth today? Are you worth $10? $100, $1,000? Now, here's how you test. If you had to go to the bank and say, this is how much I could sell everything I have for for cash, because that's all that banks care about, how much would you say you are worth today? Now, don't count your clothes, and don't count your furniture or your car or your lawn equipment. They're worth about as much as 10 cents on the dollar. What you do is you think about a garage sale. If you were having a garage sale and selling everything you own, how much could you get in cash? That's kind of a scary thought. So how much are you worth today? And how much do you want to be worth at the end of next year? If you're worth $100,000 today, do you want to be worth $125,000 at the end of next year? Then consider the end of that next year and increase your net worth goal again by maybe 10 to 15% per year. Most people who become wealthy do so anywhere between 10 and 15% a year. They don't break the bank at Monte Carlo. They just get rich slow. Today in America, it's a little different because of the state of the economy. And of course, you bought low and sold high, but very few of us did that. But 10 to 20% per year after taxes and expenses, in terms of growing your net worth is a pretty good goal, and it's ultimately achievable. So write down five figures representing your target net worth over the next five years. It seems remarkable, but the fact is that the starting point of increasing your income or your net worth is very simple. Can you guess what it is? Decide to do it. Make a decision to become financially independent. You say, well, it's not that simple. Well, it is that simple. It's just not easy. But it is simple. The primary reason that people don't succeed in life or finances is because they never decide to, and then back up that decision with determination. Now, there are a lot of things you can do after you've made a decision. There are very few things you can do before making a decision or without making a decision at all. So make that decision. Your decision may be wrong or it may be inaccurate, but at least it's a great starting point. It's like drawing a line in the ground that you step over. But what if I don't get it by such and such a date? Don't worry about it. At least get it on paper and take the first step. If you enjoyed this information and would like to receive six additional free videos and on the top questions people ask me about personal and financial success and achievement, visit www.briantracy.com successmastery. That's www.briantracy dot com successmastery and we'll set you up with six free videos.
