My First Million
The best business ideas come from noticing what's working and doing it better, faster, or for a different audience.
Back to Takes
Net worth is a silly metric - cash flow and liquidity matter much more than reported net worth
Spiciness
wealth measurement critiqueThe Reasoning
Most net worth is illiquid and based on subjective valuations, while cash flow determines actual lifestyle and opportunities
What Needs to Be True
- Private valuations remain subjective
- Liquidity continues to be limited for most wealthy people
- Cash flow provides more predictable lifestyle
Counterargument
Net worth does translate to opportunities, access, and eventual liquidity for patient investors
What Would Change This View
Better liquidity markets for private assets or more accurate public reporting of cash flows
Implications for Builders
Focus on building cash-flowing businesses over high-valuation ones
Be skeptical of paper wealth claims
Structure deals for liquidity rather than valuation
Example Application
“Choose to own 50% of a $10M cash-flowing business rather than 10% of a $100M illiquid startup”