For many business owners, the idea of “net worth” is anything but straightforward.
Unlike salaried professionals who can check their retirement accounts and bank balances to get a snapshot of their financial picture, entrepreneurs often live in a world of complex valuations, illiquid holdings, and moving targets.
And depending on the day—or the mood—the number can shift dramatically.
What’s It Worth? It Depends.
Donald Trump was once asked what he believed his net worth was. His answer: “It depends on how I feel when I wake up.” (This feels truer than ever.)
That may sound flippant, but it captures something real. If you’re an entrepreneur or real estate investor, you know this firsthand: the “value” of your holdings can fluctuate wildly depending on interest rates, market trends, recent comps, or even your own outlook.
One week, your business feels like it would command a 4x multiple. Next, you’re wondering if anyone would even buy it. You might own properties that appraise for less than their rebuild cost but still feel undervalued based on nearby sales.
This kind of ambiguity isn’t a flaw—it’s part of the deal when your wealth is tied to assets that aren’t priced daily.
Illiquidity Creates Complexity
The volatility of valuation is one issue. Liquidity is another. You might have a high net worth on paper but converting that into spendable cash—especially in a time-sensitive or tax-sensitive scenario—is an entirely different story.
We’ve met owners whose balance sheets look like they have a lot of fat available until it comes time to:
Cover estate taxes
Prepare for a liquidity event
Divide assets “fairly” among heirs
Fund a major gifting strategy
At that point, the question isn’t just, “What is it worth?” It’s, “How soon can it move—and at what cost?”
Real Assets, Real Limits
Consider real estate. You may own a property that’s technically worth $2M. But if it’s producing $8,000 a month in cash flow and deeply embedded in your long-term planning, is it really liquid?
Can you—or would you—sell it to generate cash? At what discount?
Now, consider your business. Even if it’s thriving, the market for closely held businesses is limited. Strategic buyers can be hard to find. Terms matter. Timing matters. Valuation isn’t just a number—it’s a negotiation.
All of that makes planning more important, not less.
Why This Matters for Planning
When we work with business owners, one of our goals is to help them distinguish between confidence and illusion. Here are a few key conversations we revisit often:
What’s your true liquidity profile? Not just net worth, but usable, accessible capital.
If you needed to sell something tomorrow, what would it realistically fetch? And how would that affect your plan?
Are your gifting, estate, or retirement assumptions based on conservative numbers or optimistic ones?
What needs to be flexible because valuation is fluid?
These are not easy questions. But they are critical if your long-term goals depend on illiquid assets—especially when you want to create a legacy, exit well, or take care of the next generation.
Your Net Worth Is Not a Number. It’s a Narrative.
Too many business owners are handed plans built for employees. The truth is that your financial story doesn’t fit into a spreadsheet the same way. You need a strategy that reflects the reality behind the numbers: the risk, the opportunity, the illiquidity, and the decisions only you can make.
We’re here to help you build that.