Money Talk with Nimi: Networth versus Self-worth

“What we must decide is perhaps how we are valuable rather than how valuable we are”
Edgar Z. Friedenberg, The Vanishing Adolescent

Networth is an external measure of ones worth in financial terms, while self-worth is an internal measure of how much one’s value of oneself. In our society, there is a tendency to attach self-worth and other people’s approval to material things and ostentation.

The dangers of materialism
A society that celebrates a person’s worth based on his or her assets, connections, and influence is superficial, as it builds a social strata based on material things. When people are “encouraged” to amass and cling to possessions, when their sole pursuits are on making profit, seeking pleasure, and obtaining position, it leaves little energy, time, and ability to focus on their real purpose and the things that really matter.

A materialistic society rates individuals not on personal character and achievement, but rather on the fantastic shows of ostentation. In many nations, a societal value system has evolved where material fortune is more widely celebrated than diligence, honesty, honor and integrity; such virtues are seldom accorded the respect they deserve.

As materialism becomes endemic and a society equates self-worth with networth, placing with far too much emphasis on money, power, position, and possessions and acknowledging and celebrating wealth without questioning its source, there is a tendency for people to go to extremes in order to increase their networth at all costs and by any means possible, which ultimately leads to dishonesty and corruption.

As people compete to build and to put these trappings of wealth on display, the seeds of corruption are sown. Greed and the insatiable love for materialism are at the root of bribery and corruption, which have eaten deep into the marrow of society. The endless desire of all strata of society, both rich and poor, for possessions inevitably leads to moral decadence.

How do you measure yourself?
Have you ever thought of how you measure yourself? Reflect on whether you have measured yourself by your job, your money, your position, or your possessions. Does your sense of self-worth come from your job and all its perks, your salary, your position in government or in the private sector and their attendant rewards in society?

The Next Generation
Children often identify their self-worth by the approval of their peers, which could be linked to how many toys they have or how expensive their clothes are to how quickly they acquire the latest BlackBerry, iphone, iPad, or other gadgets.

Stories abound of children asking to be dropped off before reaching the school gate so that their peers won’t see the car they arrive in. If it is not an expensive car or jeep, it could be embarrassing as they face jeers. In an excerpt from The Vanishing Adolescent 1959, Edgar Z. Friedenberg writes, “What we must decide is perhaps how we are valuable rather than how valuable we are”.

To spare the next generation from the scourge of materialism, we must teach our children to be proud of who they are, to value themselves and not to confuse their self-worth with their networth. Parents and leaders must teach their children and our youth, by example, that their true value lies in their inner qualities – their kindness, sensitivity, creativity and compassion rather than their looks, performance, possessions, and the amount of money their parents may or may not have. They must be taught to embrace hard work and diligence as a means to success and not be under peer pressure to look for shortcuts to “get rich quick.”

Why is self-worth important?
Life is not about accumulating wealth and possessions, because in the end you cannot take them with you. We often feel a false sense of security by having a large networth or more wealth than our neighbor. As we have seen in the recent past, networth and fortunes can change dramatically; wealth can be transient, and everything can change in an instant. During periods of economic turmoil and stock market decline, investors have lost fortunes; properties worth billions will be worth only a tiny percentage of their “value” if there are no buyers. Wealth is nice to have and can and does bring pleasure, but it is important to keep it in perspective. A strong sense of self-worth is the key to true and lasting fulfillment.

Primary success, of which self-worth is a part, includes character, integrity, humility, service above self, and legacy are they are far more important than the secondary success of networth that is associated with title, position, bank accounts, and properties.

In their study Inner Security and Infinite Wealth: Merging Self Worth and Net Worth, 2003. Stuart Zimmerman and Jared Rosen contrast the idea of net worth, an external measure of how much money one may or may not have, and self-worth, an internal appraisal of one’s own worth. They suggest that in order to develop a sense of wellbeing beyond material success and its outward trappings, we should strive to become more aware of what is truly important in life and the legacy we will leave behind.

Photo Credit: Madame Noire

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Nimi Akinkugbe has extensive experience in private banking and wealth management. She is passionate about encouraging financial independence and offers frank, practical insights to create a greater awareness and understanding of personal finance and wealth management issues. She is married with 3 children.Find out more via www.nimiakinkugbe.com