Is it net worth or equity? The answer is both!

Is it net worth or equity? The answer is both!

Written By Jeffrey Gitomer

KING OF SALES, The author of seventeen best-selling books including The Sales Bible, The Little Red Book of Selling, and The Little Gold Book of Yes! Attitude. His live coaching program, Sales Mastery, is available at

Is it net worth or equity? The answer is both!

When I say “equity” what words come to mind? Most people think, “home,”or “home equity,” or some even “home equity loan.” Equity is the valuedifference between what you owe on something, and what that somethingis worth. A home, or a car, or a business.

There is also negative equity – you owe more that it’s worth. This is most prevalent in cars. It’s called being “upside down.”

How about “net worth?” What words come to mind? Most people think, “capital,” “money,” or “not enough.”

The other day I was talking with a salesman who was bragging about his”net worth,” and I asked him if it was the same as his equity.

Most people don’t think about net worth. They just work, spend, invest,or save. Adding it all up only occurs when someone asks for a financialstatement or you’re about to retire and want to see if there’s enough.

Here’s the easiest way to think of the difference between the two: ifyou add up all your equities, and subtract all your debt, that willequal your net worth. Equity is determined one at a time; net worth canbe the sum of many equity items.

The reality is that both equity and net worth are not just defined interms of money, even though most people look at the terms and theresults that way – especially accountants and bankers.

FACT: There is equity in everything – not just a home or a car. And thenet worth of your life’s experiences can be measured in value that farexceeds money (although money is always nice).

How much are you worth? “Not enough” most will reply, but that’sbecause you are only measuring money. What is the equity that you havebuilt? This is also about personal worth and personal equity. And, Iwant to challenge you that the more personal equity you build, thebetter your finances will be.

Here are a few equity areas to look at and question:

  • Relationship equity. Who are you building equity with, andwhat principles are they built on? What is the value of theserelationships if they are lost? How are you building relationshipequity with the customers and the people you both need (business) andlove (family and friends)?
  • Business equity. Not just money, how about your goodwilland your career. Charity, community, employment. What are you doingbesides making profit that leads to success?
  • Brand equity. Not just in your products or your business.I’m talking about brand you – your personal website, your blog, yourweekly value-driven email magazine that is delivered to every customerand prospect. Branding is about positive promotion, not justadvertising.
  • Lifelong learning equity. How much of a personal time investment are you making in learning to become better at what you do?
  • Sales knowledge equity. Are you better than the rest? Orare you just making your numbers – or maybe even less than that? Ifknowledge is strength, then watching TV and diverting your time awayfrom building knowledge equity is weakness.
  • Library equity. What books are you thinking about gettingand reading? Why are they still on someone else’s shelf? How much timedo you devote to reading every day? As much as you should? As much astelevision?
  • Travel equity. Do you travel for fun, knowledge, business, and to “get away?” What have you learned? How has travel helped you grow?
  • Creative equity. Do you know that creativity is a scienceand you can learn to be more creative? Do you know that every one ofyour customers and connections would love it if you had an IDEA forthem?
  • Reputation equity. How are you viewed in the community and the business community? How are you spoken about? And who speaks about you?
  • Sweat equity. Usually applied to entrepreneurs, it’s thetime they put in building the business at little or no pay. But itreally means anything you work hard for.
  • Sweet equity. Spending time doing what you love, with thepeople you love. It’s reduced tension, stress, and worry — increasedfame, fortune, and fulfillment.

All of that equity adds up to your personal net worth – not measured indollars, but in who you have become. And the value of that can bemeasured in your success, your relationships, your happiness, and yourfulfillment. Hard to put a dollar value on that.

Want equity information as to where you can put a dollar value? Go, register if you’re a first-time visitor, and enter thewords BANKER EQUITY in the GitBit box.