Homework for 2010: What’s Your Net Worth?
Many of MSPmentor’s readers are entrepreneurs — the folks who launch and fund VARs, managed service providers and IT consulting firms. Many of those readers are dealing with the following paradox: You’re trying to decide how much of your own money to pump into your company in 2010. But you don’t know your own net worth. That’s a potential problem…
When I graduated from college and launched my career, I tracked my net worth pretty closely. It wasn’t much but I basically knew what funds I had at any given moment.
Then, life got complicated. I’ve jumped from one job to the next. Got married and had three kids. Moved twice. Co-launched Nine Lives Media Inc. and its associated media sites. I was still paying all of my bills and living within reason. But did I really know my net worth? Um, no.
That’s bad. On the one hand, there’s a wall between business and personal finances. But on the other hand you need to understand your own financial health — down to the penny — in order to help determine just how much effort, time and money you’re going to pour into your business.
Finally, I’m getting organized. I’m consolidating my retirement accounts into a single account. I’m getting some clarity about where I am financially. I’m tracking my net worth again. I may not always like the number. But at least I know it.