Wealth Calculus

“Wealth is just income minus expenses over time.. why do you need systems for that?”

Got that feedback from a subscriber last week.

After I replied we got into a great back & forth about “wealth calculus” which prompted this article.

I started by explaining that his formula wasn’t finished and shared a more complete one:

Wealth = (Total Assets - Total Liabilities) + (Income - Expenses) over time

When modeling wealth building it's essential to consider the broader picture, including assets, liabilities, and the impact of investments and changing asset values across time.

Wealth isn't just about accumulated savings. It encompasses the total value of what you own (assets) minus what you owe (liabilities)… and then how intelligently you use leverage.

This includes:

• Assets: Bitcoin, Cash, investments (stocks, bonds, real estate), valuable possessions (art, cars, homes).

• Liabilities: Debts like mortgages, student loans, car loans, and credit card balances.

We got into a very nerdy conversation about…