Mel Abraham explains why net worth misleads most people. If your home is half your net worth, your actual money-making assets are half what you think. Separate income-producing capital from shelter assets to see your real financial engine.
Your net worth, it's lying to you and it's not your fault. See, the formula isn't wrong. It's just answering the wrong question. Assets minus liabilities, that tells you whether you're solvent or not. It doesn't tell you whether you're truly free. And the truly wealthy households, their primary residences are usually 20% or less of their net worth. But for everyone else, it's closer to 50%. Listen, if half your net worth is in the house you live in, then your actual money machine is half the size you think it is. So separate what you own into 2 piles: what pays for your life and what just houses it. That's the real number.
