If Cash is king, then Net Worth is…?

I’ve recently started tracking my net worth. Omo, I feel like a loafer because the only thing helping my situation is my pension account. We all know I only have one because it’s statutory. After all, wetin consign agbero with overload (silly statement alert!).

On a normal day, I’m not bothered about possessions – the trappings of wealth – but to actualise my plans; I need to focus on growing the asset side of the net worth equation.

I mentioned in my April budget post that increasing my net worth was part of my goals for this year. Clearly, this is not a 12-calendar-month thing but an on-going process and so the focus will shift as I get closer to hitting my goal.

A quick word on net worth then and why I’m focusing on it.

Your net worth is essentially a snapshot of your financial health at one moment in time. It’s everything you own (Assets) less everything you owe (Liabilities) i.e. Assets – Liabilities = Net Worth.

At this point, I should say that, going into a lot of detail will make this longer than it has to be so I’ve created a glossary page which will define terms. I’ll just focus on my plans in this post.

For my purposes, I’ll define an asset by the formal definition – resources that give rise to future economic benefits. So anything I own that is not generating income or does not have the capacity to generate income does not qualify.

The plan.

As Jesus did not die for me to work a 9-5 indefinitely, I have given myself 7 years to get my house in order so that I can go off and do the things I really want to do (travel the world and then lead the life of a recluse somewhere). This means whatever I’m investing in within the set period should throw off enough income to cover my cost of living for the rest of my life. I have a number figured out based on what I perceive my lifestyle will be in 7 years. Let’s hope I’m not too far off.

I came across Dave Ramsey’s 7 baby step programme sometime last year and modified it to suit my circumstances. The main reason for this is that it is targeted at people who are working on paying off debt before they start to build wealth. If you do have debt to pay off, his programme makes sense so you should click through and have a read.

These are the steps I will be taking:

  1. Emergency Fund: The original list recommends US$1000 for this fund. Conventional wisdom will have you socking away 3-6 month’s of living expenses in an easily accessible account. I had initially wanted to go with the equivalent of 6 month’s salary in a savings account (instant access). After much thought, I have decided to have ₦100,000 in a savings account for easy access and whatever the balance of 3 month’s pay will amount to in a fixed deposit account. The reason being that I’m trying to maximise the interest earned on the funds as most savings accounts pay out around 2% in interest whereas a fixed deposit pays in the region of 7% – 10%. If I’m feeling funky, I can play around with the ₦100k in Call Deposit accounts to take advantage of the marginally higher rate they pay over traditional savings account.


  1. Investing: I think I’m the only one in my house who does not have some sort of investment. Everyone says you just have to start no matter how little you are putting in so, there will be an investing item in the next budget! Starting very very very small with shares in quoted companies. I will be doing a combination of Growth, Income and Value investing and blogging all about the experience here. I hope we can all contribute to the conversation. I’m especially interested in the reasons why people my age (20-something and fabulous) don’t invest as much as they ought. Perhaps they are just not seen to do so? Let me know in the comments or take my survey here. As I grow the pot, I’ll be diversifying into other areas of investing: Real Estate, SME investing (big area of interest for me) and other non-traditional investment vehicles.


  1. Side hustle like you just don’t care: I swear it feels like everybody and their grandmother is on one hustle or the other in this town. I used to be low-key jealous because a babe had zero ideas but since focusing on Operation Leave The Rat Race – unofficial name – I’m coming up with ideas like the world is coming to an end at 6 o’clock. I’m treating my finances like I’m running a business at the moment because training will out. To turn a profit in business, you either increase revenue, cut overheads/expenses or both. I’m taking the “or both” path. Part of the cost cutting measures involves meal planning to reduce having to eat out (L), saying no to aso ebi for people I’m not close to (this aso ebi epidemic need to die a quick death) among other things. On the income side, I started an SME consultancy at the beginning of the year. Ecclesiastes 11: 1-6 is all the expo you need on this. If you are not Christian, don’t vex. Just read it sha. Solomon had mad paper so he must know what he’s on about right? Right.

Shameless plug: If you need business advisory and/or accounting services for your SME, give me a shout via the contact form and we’ll take it from there.

To stay on top of everything, I’ll be tracking my numbers monthly because that’s how my spreadsheet is set up but I’ll probably blog about overall changes at the end of the year with a summary of the strategy for the upcoming year. All the gory details of the process will, of course, be on here. After all, “the journey is the destination”.

Phew! That was longer than I expected. To answer the question at the start. If cash is king, then net worth is the vehicle that ensures a steady stream of cash. Hashtag winning.

So, what are your thoughts? Do you save? Do you invest? Click through to participate in my survey on the saving and investing habits of the Nigerian millennial.

Have a wonderful weekend!


9 thoughts on “If Cash is king, then Net Worth is…?

  1. Pingback: Think you know how to manage money? | Sisi on a Budget

  2. Pingback: The Case of the Accidental Investor | Sisi on a Budget

  3. right now all I have is a cooperative which im not very consistent, I just started working again recently so I’m planning to keep up my savings there and try to start another type of savings. I think I also need to set realistic goals based on my salary because right now i have no other form of income.
    This blog is a very welcome development, very easy to understand and breaks everything down, kudos!


    • Thanks for coming by Tobiloba!

      If you haven’t already, you sould download the budget spreadsheet in the next post. This can be adapted to your specific circumstances. If you need any further assistance, feel free to get at me through the contact form.

      I’m glad you are finding the blog useful. Hope to see you around more often and good luck with your goal setting!


  4. Pingback: April 2015 Budget Review | Sisi on a budget

  5. how did I even stumble on this blog tonight?
    I must confess saving in Nigeria is hard Kai…but then one still has to do it.
    I currently save/invest approximately 40% of my monthly income, asides statutory pension contribution. This savings/investment is tied in cash/mutual
    funds and a cooperative society (that sounds so old school)
    Just tonight,I was discussing with my partner on how I plan to start investing in shares/the stock market on a monthly basis from the 2nd half of this year.
    I hate to say that I do not have an emergency fund set aside after almost 2years of working. This has to be included in my Q2 goals for 2015.
    Thankfully,I do not pay rent yet but that is a phase I dread.
    It’s refreshing to read something beneficial which is unpopular amongst bloggers these days.
    And finally that side hustle is so necessary. I have one already,but I think I need to pay more attention to it.
    P.S :the key to maintaining your net worth is DISCIPLINE!!! I have had to dip into my savings twice in the last two months and I feel so awful About it.


    • Hello Tee! Thank you for stopping by and I’m glad you think this post is beneficial.

      A 40% savings rate is mighty impressive! To me anyway as I’m not a saver and I struggle. I used to contribute to the Coop at my last workplace (there isn’t one where I work now) and I kind of miss it because it was automated so I didn’t really feel it. Is your coop tied to work or independent? I would like to get back into it.

      Don’t beat yourself up about dipping into your savings. That’s what it’s there for. Except it was for something frivolous or you don’t have a plan for replacing it. Even then, just file it away under “will do better next time” and work towards replenishing it.

      Soz for the long comment. Have a pleasant week!


  6. Thanks Banji!

    That’s another angle as regards rent. If the only consideration here is that the amount of time spent in rented property is not commensurate with rent paid, then would you not say that the same applies to own properties? What I mean to say is, when you consider the amount expended in acquiring the land, building a house, paying annual charges etc. will it equate to what is spent on rent? Which is the more economical option? Is the fact that you are putting money in another person’s pocket a consideration? So many questions! I wonder if anyone has done an analysis of this in the Nigerian context.

    Thanks for giving me something to think about over the weekend! Haha.


  7. Hmmm…Naija…..just when I was about to click send…I lost internet connection. I hope I can sustain the anxiety not to crush this keyboard as I write again.

    Well I do save and invest for as long as I can remember with an ultimate goal of financial freedom…aaahhhh …not the Dangote realm. Just enough to sustain my moderate and simple living style. For me, my cycle entails moving cash to real estate and shares, out of shares into real estate and hopefully into Bonds and dividend paying shares….again , ultimately to generate adequate cashflow to sustain my modest life style….but first I have to get this thing off my back. I have to stop paying rent. I cant sustain the weight and pain of having to cough out so much for an apartment a barely spend 40 hour average in a week in. Its disgusting even getting a reminder to set the engine in spinning reserve to fire a rent renewal. I think for everyone, getting this done is the ultimate starting point to financial freedom, except if you are not residing in Lasgidi.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s