COLOURS OF MONEY

What are you WORTH

BY DWAYNE RICHARDS, CPA (THE ENLIGHTENED ACCOUNTANT)

I was first issued in 1876

My production moved to Canada in 1908

My shape changed from round to 12 sided from 1982 to 1996

My composition changed 2 times; in 1997 and 2000

My outside design changed 5 times

My peak production was 1.26 billion in 2006

My last production was on May 4, 2012

I was removed from distribution on Feb 4, 2013

What am I?

Did you know that the original Canadian penny contained at least 95.5% copper and that an 1870 penny would be worth about 31 cents today, adjusted for inflation? And by 2012 it cost the government 1.6 cents to produce a penny, so by canceling its production, they saved over $11 million in 2013? And finally, did you know that in 1936 three “dot cent” prototypes were produced and are so rare that they are estimated to be worth over $400,000.00 today (Schwartz, 2013)?

So, when somebody says to you, “a penny for your thoughts,” take pause and consider how much are your thoughts actually worth? What is your net worth?

It’s time to calculate your net worth

Let’s start the New Year by calculating your worth in dollars; other stuff is nice and it makes you feel good but you need a benchmark. You need a line in the sand or at least a starting point so that you can compare yourself to yourself one year from now when you do it again. Dave Ramsey—America’s trusted voice on money and business—says that, “You must gain control over your money or the lack of it will forever control you.”

Where to start?

When it comes to calculating your net worth, don’t compare yourself to others; compare yourself to yourself. This is about knowing your starting point, planning to improve your personal best, and measuring your net worth at the beginning of each new year. If you’ve never done it before, let’s do it right now – 2021 is your year to start a healthy new financial pattern!

“You must gain control over your money or the lack of it will forever control you.”

Dave Ramsey, Money Management Expert

Your first net worth calculation

Your net worth is based on the following standard equation and I’m going to take you through each variable one by one. So grab a scrap piece of paper or open a separate window to gather the following numbers and add them up.

ASSETS - LIABILITIES + INCOME - EXPENSES

ASSETS

Assets are things that have value and can be sold or converted to dollars – what is the total value of all your assets?

Here are some examples of assets: Business • Real Estate • Investments • Insurance • Jewelry

**Did you know that your biggest asset is YOU and your ability to earn income? We will address that in the Income section!

LIABILITIES

Liabilities are money that you owe – what is the total of all your outstanding loans?

Here are some examples of liabilities: Mortgage • Car & Student Loans • Line of Credit • Credit Card Balances

INCOME

Income is the total of all monies received on a regular basis in exchange for products or services or dividends earned from investments. Here’s the official calculation for income: rate×hours worked or products×units sold. What is your annual income?

Here are some examples of income: Work salary • Paid invoices from services provided • Income from side gig Payments from affiliate programs you belong to

Remember I mentioned that your ability to earn income is your biggest asset? Well, it’s also the asset that is the quickest and easiest to grow, and that’s something to get excited about! We will address this after you’ve finished calculating your expenses and current net worth.

EXPENSES

Expenses are the cost required for regular products or and other miscellaneous goods and services – what is the total of all your expenses? Here are some examples of expenses: Rent or mortgage payments • Utility bills • Daycare, food, and clothing for children • Gas and car payments • Cable, Wifi, and cell phone bills

So what? Now what?

So now that we’ve gathered the numbers for your assets, liabilities, income, and expenses, plug them in and what is the magic number? What you do with that number next is up to you. If you want to engage the services of a financial advisor or an accountant, your net worth and the breakdown of assets, liabilities, income, and expenses is going to be the first information they will collect from you so they can help you manage your finances.

Net-worth and a growth mindset

Motivational speaker and ex NFL football player Trent Shelton famously said, “You accepted less because you thought a little was better than nothing. Know your worth.” 2021 is a perfect time for you to explore what you have to offer, tap into your greatest asset, and grow your net worth!

Five ways to increase your income:

• Work more hours

• Add a product or an additional service

• Create an online course or a workshop

• Become a business owner and hire someone at a lower cost to do some or all of the work

• Specialize your products and/or services and increase your rate.

I want to leave you with this… this article begins with the journey of the Canadian penny and how its value changed over time. Also remember how those three pennies produced in 1936 are now worth around $400,000.00 because they are unique. It’s 2021—a fresh new year—I challenge you to tap into your greatest asset and explore how to specialize your offerings because that is where you will discover the full potential of your net worth!