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  • Writer's pictureFernanda Latorre

The sense of self-worth as a self-identity

Diversification in Finance means you’re able to maximize your overall financial return across a wide variety of market conditions while reducing your losses. The opposite would be to put everything in one bucket.

This principle of diversification applies very well to self-identity, which is an important aspect of self-esteem.

Self-identity = How you see yourself.
Self-worth = How you feel about your worth as a human being.

When you combine the two, it says that your self-worth is a function of your self-identity.

· If you have a poor sense of self-identity, you will naturally have a poor sense of self-worth.

· If you have a healthy sense of self-identity, you will also have a healthy sense of self-worth.

When you put all your eggs in one basket, you are defining yourself in that single aspect.

When I had a good year in my career, I felt good about myself.
When I had a poor year in my career, I felt bad about myself.

This is the equivalent of having an investment portfolio consisting of a stock that fluctuates wildly from year to year.

Having your identity based on only one narrow role in life is a recipe for having an unstable life. And here is when the value of having a diversified self-identity is critical to one’s life.

Nothing in life runs smoothly for 50 years. The only guarantee in life is that there are no guarantees. Things change. Things fluctuate. When you diversify your self-identity, you buffer yourself to some extent from the downsides of life.

So, how do you see yourself? What are the roles you would like to point out? Career professional? Father? Friend? Volunteer? Athlete? And if one of them has a problem, be sure the other ones don’t change by it. E.g., If I don’t achieve my athletic goals one year, the other aspects of my life aren’t negatively impacted.

Having a multi-faceted and diversified sense of self-identity limits “losses” in self-esteem without capping any of the “upsides.”

In this past week, in how many different ways did you see yourself?

How are you defining your own identity and sense of worth?

Is your sense of self-worth low or easily shaken?

Article inspired by Victor Cheng.

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