Liquid Net Worth Reality

Shaan Puri shares his perspective on managing wealth and calculating net worth, emphasizing a focus on liquid assets and maintaining a practical approach to financial management.

Key Points:

• Liquid Net Worth Philosophy:

  • Only calculate liquid net worth, excluding illiquid assets
  • Don't include startup investments until they become liquid
  • Private business valuations aren't included in calculations
  • Focus on what you can actually access and use

• Money Management Principles:

  • Money is a tool to enable a better lifestyle
  • Maintain 2-3 years of expenses in safe investments
  • Know whether you're in wealth creation or preservation mode
  • Biggest investment mistake is selling too early

• Decision Making Process:

  • Evaluate multiple expert opinions and theories
  • Look for contrasting viewpoints from credible sources
  • Make decisions based on both intuition and evidence
  • Create hedges against potential risks

• Regular Financial Review:

  • Conducts quarterly financial reviews ("financial picnic")
  • Manually tracks liquid assets and monthly burn
  • Maintains awareness of income sources
  • Spends approximately $30k monthly on living expenses

• Investment Strategy:

  • Prefers concentrated bets in things he believes in
  • Uses "break glass" mentality before selling investments
  • Focuses on private businesses where he has more control
  • Learns through angel investments about where the world is going

• Risk Management:

  • Maintains confidence in ability to rebuild if necessary
  • Views self as primary safety net rather than investments
  • Acknowledges tendency to be drawn to contrarian opinions
  • Tries to avoid dramatic portfolio changes based on macro views