Know your worth
Self-worth and net worth are inextricably linked
There's a telling vignette in a piece that Justine Musk, the former wife of Elon Musk, wrote for a women's magazine that has always stuck in my mind.
She's describing a conversation she and her ex-husband had in the early days of their relationship, during which Elon asked her if she'd like to have children. "One or two," she answered, "although if I could afford nannies, I'd like to have four."
Elon's answer, as she recounts it, is a masterclass in self-assurance. "That's the difference between you and me," he laughed. "I just assume that there will be nannies."
While countless self-development books have attempted to dissect the habits of successful entrepreneurs, they often overlook the most obvious one: self-esteem. Sure, entrepreneurs also tend to get up early, exercise and network, network, network, but the foundation of these habits is a rock-solid belief in their ability.
And the more they believe in their ability, the more money they have in their bank account. Or as Robin Sharma puts it: "To double your net worth, double your self-worth. Because you will never exceed the height of your self-image."
Self-worth and net worth are, of course, not one and the same thing - when you start deriving your self-esteem from your pay packet, you're in trouble. Yet it's an inarguable fact that those with a sturdy sense of self-worth tend to have a higher net worth too.
The correlation between self-worth and net worth has been borne out in many studies, including one that linked high self-esteem in teenhood with a higher salary in adulthood.
It's also the subject of some recent self-development books, including Nancy Levin's Worthy: Boost Your Self-Worth to Grow Your Net Worth.
"How many years did I waste, postponing what has proven to be a much better life - simply because I went into hiding and didn't see that I was worthy of something better?" she asks.
Self-worth is a woolly concept at the best of times. While we understand its importance, its intangibility makes it difficult to measure. If, however, we think of it in terms of net worth, it becomes easier to assess the cost of not having it.
Would you be earning a higher salary if you truly believed that you deserved more money - and negotiated for it when you should have? Would you be dating someone who has never taken you out for dinner if you believed that you deserve to be spoilt too? How much more time would you have to make money if you didn't feel obligated to people-please?
"When we feel worthy, we don't resist what's good for us. We feel we deserve what we want, so we find it much easier to step right over our fears and go for it," adds Levin.
We've all heard the underpaid and the under-appreciated blame the people who clearly don't value their contributions. In truth, they don't value themselves. Those around them - their bosses, spouses, friends - are simply acting accordingly. Barbara Stanny puts it even more bluntly in Overcoming Underearning: "All underearners, without question, share one common trait," she writes. "A high tolerance for low."
When we think of self-worth in terms of net worth, we also discover that wise money management is linked to healthy self-esteem. Over-spenders and under-spenders have more in common than you may think. Fundamentally, they don't believe that they are worthy of being empowered by money. The over-spender self-sabotages with a shopping spree and then scrimps and saves for the rest of the month. The under-spender self-harms by penny-pinching and turning off the heating.
This is why Kate Northrup, author of Money: A Love Story, thinks of money management as self-care, just as she recommends regular self-care as a way of building self-worth and, consequently, net worth. "Dedicating time to care for yourself shows you that you are worth caring for. You are worth working for. You are worth loving, and when you realise this, you are able to give more value, which in turn brings more value into your life."
It's also worth digging deep and challenging some of the beliefs that you have accepted as truth. It could be as simple as overcoming recession consciousness - the belief that you should be lucky just to have a job and that your salary is non-negotiable, or the idea that asking for more money is avaricious or entitled.
Northrup challenges this head-on when she writes: "Now, are we dealing with a situation on the planet where we could use some redistribution of money? Absolutely. But you not charging what you're worth does not feed a child in Africa."
Likewise, have you acknowledged your potential? Elon Musk imagined a privileged life when he considered the not-too-distant future. Do you recognise your potential for growth when you make five-year plans, or are you still forecasting financial shortfalls?
In some cases, it's necessary to go even deeper to reverse what Stanny calls, "generations of cultural conditioning and a lifetime of personal programming". That means asking yourself uncomfortable questions, along the lines of 'Why do I deserve less than other people?'
It's not an easy exercise by any means but it will help you get to the root of your low self-worth, and over time, boost your net worth too.
Health & Living