Learn how to increase your net worth effectively in just few years time. Most people don’t even care about their net worth nor they don’t want to know and monitor their net worth if it is increasing or not. Why? It is because they are focusing on their income. A rich man will absolutely calculate his worth rather than his working income. According to T. Harv Eker, the author of “Secrets of the Millionaire Mind” book, “rich people focus on their net worth while poor people focus on their working income”. This is why it is necessary to increase your income so that you will become really wealthy.
But, before we continue studying this guide, let us know first the meaning of a net worth and how to calculate it. A net worth is a person’s material wealth. It simply means his properties such as house, cars, business includes equipments, cash, stocks shares market value, and other things that has value are called assets and the things a man owed are called liabilities.
To compute a net worth is easy, just compute the total value of an asset and subtract the total liabilities into it. Example, if your assets value is $3 Million and you have a $750 Thousand liabilities, then your net worth today is $2,250,000.
See Also: How to Create a Net Worth Statement?
Tips to Increase Your Net Worth
Follow these guides and surely your net worth will increase in just few years. There are formulas out there that you can read on books, blogs and magazines on how to become wealthy, but, the main formula to become wealthy is to increase your net worth. If you want to become really rich, focus on increasing your net worth.
When tracking your net worth, you only need a paper or a ready-made assets and liabilities net worth format copy. If you want to make it easier, download the money manager app by Realbyte Inc, on Google Play and every month fill out the data required on the money manager app.
How to Increase Your Net Worth in Few Years Time?
1. Increase your income. To increase your net worth, you must increase your income. If you work for someone else, consider starting your own business, make extra money while you are still employed. That way you can easily increase your income.
2. Save a lot of money. Don’t spend too much. Your goal is to increase your net worth. Avoid over spending save a lot of money in your savings account and follow number 3.
3. Invest and make your money grow. When you have the habit of saving, investing will be so easy for you. Rich people increase their net worth easily because they know how to make their money grow over time, through investing.
4. Buy assets. Buy assets not liabilities. Remember assets can help you increase your net worth. Some example of assets you can buy are stock shares, bonds or mutual fund shares. Simply means assets are the things that are appreciating in value not depreciating its value.
5. Don’t buy liabilities. While you are keep on buying assets, stop buying liabilities. Some examples of liabilities are monthly installment plan of your new gadgets, new car or your new house. Anything that can give you debt are liabilities.
6. Have a simple life style. You have to simplify your lifestyle if you really want to increase your net worth. Try to prepare a meal in your house rather than always eating in a fine dining restaurant. Try to buy a second hand car rather than buying new and luxury car. Always buy only what you need not the things you just “want”.
7. Track your net worth. I agree with T. Harv Eker, on his statement “what you track increases, what you focus on, expands”. Therefore, if you really want to increase your net worth you have to track your net worth. Focus on it not on your working income.
Related: How to Track Your Net Worth
Citations and Reference: Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth, T. Harv Eker, Harper Collins Publisher 2005, page 137-139
Financial Tips and Warnings
Hire a financial planner, make sure your financial planner is knowledgeable to any types of investments and he is really skillful when it comes to providing good advices on how to invest money and retire rich and comfortable. Make sure the one you hire is a certified financial planner.
As a summary, to increase your net worth, you must increase your income, save money, invest your money, buy assets not liabilities, have a simple life style and track your net worth every month, every quarter or once a year.