THE TRUE MEANING OF WEALTH.

How much are you worth? Read on to find out.

TAKE A LESSON. IN OUR JANUARY ISSUE, WE SHARED with you the steps it took to become financially empowered through the Black Enterprise Circle of Wealth--knowledge, commitment, investment and portfolio management. In fact, the process is the launching pad for the Black Wealth Initiative. our comprehensive financial education and money management program.

But before you leap into action, take a moment to figure out what wealth really means. Elementary, you may think. Not so. When we surveyed our readers in the blackenterprise.com Financial Health Survey, we found that respondents had many definitions of wealth. (Some of those polled checked more than one response). Fully 57% used income as a criterion, while 29.9% and 23.3% viewed education and one's profession, respectively, as key measures.

But 84.2% selected the appropriate response: they concluded that wealth equals net worth. In other words, wealth is not synonymous with your take-home pay or the money that you draw from your business. Your net worth is calculated by subtracting your liabilities from your assets. Simply put, it's what you own minus what you owe.

We aren't just splitting hairs here. It's extremely important that you make such distinctions because, as you shape your goals, you want to be crystal clear about how to quantify them. Such barometers have become increasingly important as the nation's economic expansion--now 109 months long and counting--continues. Just a quick history lesson to put the boom in perspective. According to the New York-based Economic Cycle Research Institute. between 1948 and 1991). the average expansion lasted 52 months while the average recession lasted just 11 months.

So, although the economy seems less prone to up-and-down business cycles than it did in the past, that doesn't mean you shouldn't be prepared for a downturn, Even though more Americans, like you, are investing in the stock market--the Dow Jones industrial average has been up 300% over the past decade--they are spending just as quickly. According to the Department of Commerce, the personal savings rate--savings as a percentage of after-tax income--dipped to 1.5% in December, a record monthly low. In 1999, the end-of-the-year buying binge pulled the savings rate to an all-time low of 2.4%. In 1998, it was 3.7%.

According to a recent study by the University of Michigan, the wealth divide is expanding. The net worth of the median black household decreased from $8,400 to $7,500 between 1994 and 1999, while at the same time the net worth of the median American household increased 9% to $50,500. "The decision to invest or save discretionary income vs. consume is a zero-sum decision. If all of the discretionary income that you decide to consume is not available to invest, then by default you've made a decision not to invest or save," asserts John E. Williams, chair of the department of economics and business at Morehouse College in Atlanta. "We still have a nation of consumers instead of wealth accumulators. You gain real wealth through a long-term program of savings and investment."

How you define wealth and, in turn, employ strategies to increase your net worth will ultimately determine whether you join the ranks of the truly rich. Paramount to achieving that objective is your adoption of principle No. 4 of the BLACK ENTERPRISE Declaration of Financial Empowerment (DOFE): To measure your personal wealth by net worth, not income. The following steps may educate you about the best way to get there.

* Learn about your assets and liabilities. You should know just where you stand. In her book Minding Your Money: Personal, Money Management and Investment Strategies (Book Partners Inc., $14.95), author Patricia Stallworth asserts that one critical step is to take "a financial inventory through a net worth analysis." By studying every nook and cranny of your financial life, Stallworth believes that you can identify assets that will help you reach your objectives as well as spot barriers that will keep you from getting to your destination.

First, let's be clear about what we mean by assets and liabilities. Your assets include everything you own, including cash, securities, real estate, property (i.e., automobiles, household furnishings, jewelry, etc.), life insurance, business interests and debts that are owed to you. On the other hand, liabilities are debts that you owe, including current bills, your mortgage, auto loans, student loans, lines of credit and credit cards.

Now, it's time to get organized. Gather all the documents related to your assets and liabilities. One method of sorting through those mounds of financial documents is to develop an asset and liability organizer, as Stallworth sets forth in her book (see charts). For easy reference, Stallworth stresses that you place each item in a specific category. For example, include information on such assets as your stock portfolio by company, number of shares, purchase date and the location of the supporting documents for the security. The details on a liability such as a mortgage would include the type of loan (fixed-or adjustable-rate mortgage), your balance, monthly payment and the number of years you have left to pay.

* Develop a net worth statement. After you organize your documents, list all your assets in one column and all your liabilities in another. Tally both columns and then subtract your debt obligations from what you own. If you have more liabilities than assets, this number will, of course, be a negative. To calculate your net worth, use the BE Wealth Calculator found in the Guide in the BE Wealth Building Kit (you can receive a copy of the complete kit by calling 877-WEALTHY or logging on to www.blackenterprise.com. In addition to an assessment of your cash flow, the document can come in handy when you sit down with your financial planner or investment advisor.

* Create a plan for long-term wealth. It's critical that you develop solid wealth goals. And the most obvious objective is to develop a solid and diversified retirement fund. One report card of wealth is how much you've managed to accumulate in assets after working 30 years or more. In fact, the American Savings Education Council's 1999 Minority Retirement Confidence Survey revealed that 24% of all workers were not confident that they are prepared financially to retire comfortably in their golden years. For African Americans, the figure was 28%. And the top reasons that African Americans started a savings program were 62% felt that they couldn't rely on Social Security, while another 59% indicated that seeing seniors struggle in retirement served as a primary motivator. To drive the point home, the Michigan study also shows that in 1999 the median black household held barely 9 cents for every dollar of wealth that white households held.

Regardless of your age, build assets now. First, figure out how much money you will need to retire comfortably. The Retirement Planning Worksheet in our Wealth Building Kit can help you make such a determination.

One means of resisting the temptation to fritter away today's dollars is to sock them away in a savings and investment plan through your workplace. By investing in company-sponsored retirement plans such as your 401(k) or 403(b), you contribute dollars that grow geometrically--and, most importantly, tax-deferred. The kicker: your employer will usually match a portion of the money that you put into the plan. Experts suggest that you max out your contributions-pump as much funds into your account as possible. The maximum allowed is $10,500 annually.

* Structure your own retirement program. Don't rely solely on your company plan to build up assets. After the company-sponsored plan is fully funded, place your hard-earned dollars into such vehicles as a nondeductible Both IRA, which will provide you with tax-free withdrawals after the age of 59 1/2 if you've held the account for five years or more. However, the law governing Both IRA plans sets limits on the income level of participants. For single taxpayers, it's from $95,000 to $110,000; for couples, it's from $150,000 to $160,000. Contributions to the account are limited to $2,000 per year for each taxpayer.

To grow tax-deferred dollars without the limitations, invest in variable annuities, an insurance contract which provides a number of mutual fund options. The annuity guarantees a pay-out at a specified time, usually upon retirement, while the vehicle offers a variety of stock- and bond-fund offerings. However, if you withdraw funds early, you will be hit with the same 10% penalty you would pay for pulling funds prematurely out of other retirement vehicles.

* Divvy up your assets. As you devise your wealth strategies--especially as they relate to retirement--divide your money into several asset groups. This will help you keep track of your myriad investments while creating a hedge against economic shifts and market swings.

Asset classes include cash equivalents (CDs, checking and money market accounts), bonds and real estate. The asset and liability organizer can help you identify and place a value on these investments. In fact, see a financial planner about developing an asset allocation plan. First, determine if you're willing to lose money in a given period, whether it's quarterly, semiannually or annually. Fill out an investor's profile to determine your risk tolerance and investment objectives. The key is to be honest: don't state that you're an aggressive investor if you get butterflies in your stomach as soon as you click on CNBC. One of the best guides is age, because the shorter the time horizon, the less time you have to ride out swings in the market.

The application of the aforementioned procedures starts with having a clear understanding of wealth and knowing that it doesn't come merely with a promotion or a new contract. It comes from studying your financial position, making the proper adjustments for maximum returns and aggressively monitoring them. Building lasting wealth is also knowing another important fact of life: school is never out.

ASSET ORGANIZER

How to Categorize Your Assets

By using the following worksheets, you can keep track of your assets in various classes. This will help you determine everything that you own when you calculate your net worth.

Part -- Assets   Assets          Assets            Assets
CASH             SECURITIES      REAL ESTATE       OTHER(6)

Name of          Company         Property          Item #1
Institution                      Type(4)

Type of          Type of         Property          Purchase
Account(1)       Account3        Location          Date

Account #        Account #       Purchase          Cost
                                 Date

Interest         # of Shares/    Cost              Current
Rate             Face Amount                       Mkt. Value

Amount           Purchase        Improvements(5)   Owner
Invested         Date

Maturity         Maturity        Current           Location(2)
Date             Date            Mkt. Value

Current          Total           Owner             Item #2
Balance          Cost

Owner            Interest        Location(2)       Purchase
                 Rate                              Date

Purpose          Current                           Cost
                 Mkt. Value

Location(2)      Annual                            Current
                 Income                            Mkt. Value

                 Reinvested                        Owner
                 Distributions

                 Owner                             Location(2)

                 Purpose

                 Location(2)

Assets            Assets               Assets
LIFE INSURANCE    BUSINESS INTERESTS   MONEY OWED TO YOU

Company           Company              Individual/
                                       Company

Type of           Type of              Original
Policy(7)         Business             Loan Amount

Policy #          Annual               Balance
                  Income               Due

Face              Type of              Interest
Amount            Ownership            Rate

Purchase          Owner                Annual
Date                                   Income

Owner             Value of Your        # of Years
                  Interest             Remaining

Insured           Location(2)          Owner

Beneficiary                            Location(2)

Loan
Amount

Cash
Value

Location(2)

(1) Checking, passbook savings, money market accounts, and CDs.

(2) Location of supporting documents and statements. Some common locations include: home file (include folder name and location), safety deposit box or attorney.

(3) Stocks, bonds, annuities and mutual funds.

(4) Personal residence, vacation, rental.

(5) Keep an ongoing home file of improvements as long as you own the property. Place the current total here.

(6) Includes jewelry, collectibles, etc.

(7) Term or whole life.

Source: Minding Your Money: Personal Money Management and Investment Strategies by Patricia Stallworth (Book Partners Inc., $14.95).

LIABILITY ORGANIZER

Determine Your Total Liabilities

By using the following worksheets, figure out the different categories of debt. You will use the sum of all assets to determine your net worth.

Part II -- Liabilities    Liabilities    Liabilities
MORTGAGES                 OTHER DEBTS    CREDIT CARD

Mortgage                  Lender         Lender
Holder

Mortgage                  Type of        Account #
Type(1)                   Loan(4)

Account #                 Account #      Interest
                                         Rate
Mortgage                  Interest       Current
Balance                   Rate           Balance

Interest                  Original       Minimum
Rate                      Loan Amount    Mo. Payment

Monthly                   Balance        Amount Paid
Payment                   Due            Monthly

Type of                   Monthly        Annual
Loan(2)                   Payment        Fees

# of Years                # of Years     Ending Bal.
Remaining                 Remaining      Last Year

Owner                     Owner          Owner

Location(3)               Location(3)    Location(3)

(1) Personal residence, vacation, rental.

(2) Fixed or Adjustable Rate Mortgage.

(3) Location of supporting documents and statements. Some common locations include: home file (include folder name and location), safety deposit box or attorney.

(4) Auto loan, education loan, home equity loan, personal loan, retirement account, life insurance, line of credit, other.

Source: Minding Your Money: Personal Money Management and Investment Strategies by Patricia Stallworth (Book Partners Inc., $14.95).

You can get your copy of the BLACK ENTERPRISE Declaration of Financial Empowerment and the BLACK ENTERPRISE Wealth Building Kit by calling the toll-free number 877-WEALTHY, or logging on to www.blackenterprise.com