Character is Net Worth

A useful metaphor to think about character of a person is their financial “net worth”. Like your net worth, this does not mean that you have that much cash to spend. It is a sum total of something.

Net Worth is the Sum Total of the Assets & Liabilities

Character is the Sum Total of the Decisions you Own: Good and Bad

Like your Net Worth can be negative due to a large liability e.g. debt, your Character can be on shaky grounds in uncertain times. This is not necessarily a bad thing. It’s only through debt (cash infusion more precisely) that businesses grow — and it’s only through uncertain times that Outstanding Character is built.


Character, like your Net Worth takes time to compound. If you break the momentum e.g. by shying away from tough decisions-you’ll have to take a heavy hit.

Much like Net Worth, Character can be re-allocated. In fact the only way grow it, is to take risks and make decisions fraught with moral/ethical complexities.


The upside of having outstanding character is that it’s freeing. If you can trust yourself that you will not succumb to specific temptations. If you know that you won’t get caught in elaborate traps set by demons, you can go where even angels fear to tread. It deepens with which you can embrace the world and yet stay untarnished with it’s malice. You can walk among King and it’s impostor courtiers in the morning and yet not lose touch with the common folk.


Someone can steal your money. Or you can give it away. Share it with your loved ones as well.

Character is as much as part of your body as your DNA—hard to steal or give it away. It is for you. You cannot inherit it wholly. You cannot transfer it wholly.

You might ask, but what if I endorse someone ?

It’s time we talked about Reputation, and what sets it apart from character. Like character, Reputation takes years to compound. But the similarities end there.

Reputation is Insurance

The apt metaphor for reputation is that it’s a form of insurance. If you fuck up, or the fates are unkind on you—your reputation insulates you from certain kinds of damages.

Having a good reputation gives you a chance for a do-over. A good character actually gives you the strength to ask, earn and make that do-over work

Shared and Specific

Reputation, much like insurance is often expanded to cover others. For instance, Venture Capital is a game which employs endorsements and introductions.

Moreover, it can be specific e.g. professional, personal, family and so on. Much like insurance, you have to keep showing up so ensure that it doesn’t deplete or expire.

The other thing is, reputations are built on the perception that others have of you—thus it’s that more fickle. Not only can people be fools, their perceptions are influenced by what they think of themselves more than what you are.

People—are black mirrors. They do reflect what you are, but they tint it with their own world view. That is why reputations are always distorted

But the decision that defines us: You can either be someone, or do something.

Being someone means that you decide in favour of how your decision will be perceived—and this enables your reputation to survive and grow. Doing something implies that you risk your reputation so that you can act in consistency with your own internal validation.

Identity is Debt

Things which you consider “innate” to you or parts of your identity is debt. The longer something is part of your identity, the more likely is someone will use it to make you a slave to their ideas.

An abstract example: consider the political polarization today. I can bet that large fraction of people on both sides are good, well meaning individuals. So where does the vitriol come from? Hacking parts of your identity e.g. “progressive”, “christian”, “patriotic”, “nationalistic” to their own ends. They persuade you to abandon your own ideals!

The earlier in your life these ideas/ideals were taught to you—the more insidiously they are part of your own identity. This is debt, and whether you believe it or not, someone will come and collect on it. They’ll make you act in ways which are even harmful to you over the long term.

Since identity is consisted primarily of self-perception, you only need decide and commit to pay off this debt and you’ll be on your way. It does not require consultation—or even cooperation from anyone but your future self.

Be proactive, pay off your debts. Keep Your Identity Small.

Three to Take Away

If I were to distill pragmatic financial advice into 3 points, it’d be this:

  1. Build Wealth
  2. Insure against rare but plausible events
  3. Don’t take crap debt

Drawing an analogy, I propose the pragmatic choices are these:

  1. Build Character Wealth
  2. Build a Reputation
  3. Keep your Identity Small