Are you a frequent recipient of unsolicited advice? I mean other than when you read my blog?
I hate unsolicited advice, but I have to admit it's been beneficial in my life. For example, a friend once told me that I needed to stop wasting my time hanging around nice guys. "Your willingness to hang out with nice guys," he said, "Is the reason that so few good men ask you on dates."
After the feelings of shock and anger wore off, I saw that he had a point. Nice guys were a safe, flattering time suck. I loved to receive attention from nice guys, but I had no reason to date them. Good men, on the other hand, represented possible commitment, and I gave them little opportunity because I wasted my time with nice guys who had no long term potential.
It's not that hanging around nice guys is bad. It's just that if your goal is to attract a good man, hanging around nice guys is a waste of your most precious resource, time (and flirting energy).
You might be interested to learn that I've fallen prey to the "Nice Guy" problem in my personal finances too. Have you? You'll have to look at your net worth (and your stuff) to find out.
What is your net worth?
Your net worth is a simple calculation that shows the monetary value (in current terms, but not present value for you finance nerds) of your assets less your liabilities (debts).
No, your net worth isn't the same as your actual worth (the latter being far more valuable), but net worth is a nice, back of the envelope way to say, "this is how I'm doing financially."
Like ogres and onions, net worth appears to be simple, but it is full of layers. One could ask a billion questions about her net worth (is it growing or shrinking, how fast, why is it changing, what can I do to change it, is my net worth helping me meet financial goals, is it helping me meet non-financial goals, etc.), but this is one of my favorite questions to ask:
Are my assets working as hard as they ought to be working?
By that I mean, are your assets consistently providing you with enjoyment, protection, more money or more opportunities? If they aren't, why the hell are they part of your net worth? It's like you're holding Nice Guy Assets when you're looking for Good Man outcomes.
What are the nice guys in your net worth?
Nice guys are the parts of your net worth that do nothing for you. For one reason or another, the nice guys are easy for people to hold onto, and they aren't bad (as in they aren't liabilities), but they are wasteful.
When it comes to net worth, these are some common "nice guy" assets:
Cash: Experts recommend 3-8 months worth of spending in cash. If you've got more than that, you need to evaluate if the extra protection from the additional cash seems worth it. Rob and I invested cash into after tax brokerages in 2013, 2014 and early 2015 because we had too much cash on hand.
Electronics: Smart phones, tablets, laptops and more all give you the opportunity to connect with others, learn, enjoy the world and make money, but if you're not using them, they are a waste of space and more importantly, you're wasting money by not selling them a year ago.
Houses: Houses are assets, but they cost a butt ton of money to maintain (last year we spent $23K on our mortgage free home). If your house is too big, too expensive (especially relative to rent), or too unruly to maintain well, you might be better off selling and trying again later on.
Cars: Everyone knows that cars go down in value, but cars are great for transportation, and I find that it's wonderful to own one car, but owning too many cars or too fancy of cars for your needs and wants is excessive. If your cars take up a big part of your net worth, you might need to reevaluate your relationship to your cars.
A poorly designed portfolio: Do you know how to construct an investment portfolio? If you don't, it's likely that you are positioned too conservatively or too aggressively. Learning how to invest will help your investments work hard for you. (Need some tools, consider checking out DIY.Fund which is a platform that I really love (full disclosure: I write for their blog, but I also use the product every day)).
Wardrobe: When you have too many clothes, or too nice of clothes relative to what you really use, you're likely to buy more clothing and still struggle to put together a cohesive outfit. A nice wardrobe can help you advance at work and make you feel confident, but an unwieldy wardrobe will cost you time and energy in the long run. Get rid of the stuff that you don't wear, and you'll be happier.
You might be surprised to learn that I am guilty of owning too much of five of these assets (cars being the exception). It's easy to trick ourselves into thinking that every asset is created equally, but that's not true... some assets are more valuable TO YOU than other assets. If you've got assets that aren't working hard for you, ask yourself if you've fallen prey to the nice guy problem. If you have, consider how you can trade up.
I'm a wife, a mom, an employee, and a personal finance nerd who is devoted to spreadsheeting my way through life.