Article summary
Your net worth (what you own minus what you owe) is an excellent measure of your personal wealth. Of course, you’d like your net worth to grow over time. A high net worth provides a cushion from financial issues and setbacks since you have money to fall back on or valuable assets that you can sell in order to generate cash. Increasing your net worth is among the most important steps to achieve financial freedom. But how can you increase your net worth? Here are some steps you can take to get started.
Find New Income Sources
Your day job doesn’t have to be your only income source. Freelance work, a second job, selling items online, or launching a part-time business are other ways to earn money. Consider passive income sources as well, such as affiliate marketing, creating online courses, renting your home on AirBNB when you are away, or selling stock photos. The earning opportunities are endless and only limited by your own time and energy.
Purchase Appreciating Assets
While speculative, one way to grow wealth is to buy assets that appreciate in value over time. This means that their value increases at the same rate of inflation or faster. For example, homes typically increase in value as time progresses. Other possibilities include art, classic cars, precious metals, and fine wine.
Get Out of Debt
Growing your net worth isn't just about accumulating money, but also about eliminating or reducing your liabilities. While it’s easier said than done, strive to eliminate credit card debt, student loans, auto loans, or other high-interest debt as soon as possible. Their high-interest debt is the main threat to building and growing your net worth. Always make minimum monthly payments, and work out a plan to put extra toward outstanding balances as you’re able.
Investing
One of the wisest things you can do is make your money work for you. The average saving account pays very little interest and takes much longer to grow your principal. You’ll receive higher rates of returns on other financial instruments such as stocks, bonds, or mutual funds. Always consult with investment professionals before investing so you understand the risks and rewards.
Investing in a financial product like Home Price Protection from REZITRADE allows you to protect some of the equity you’ve built in your primary or investment home. If home prices decrease, Home Price Protection could even provide you with extra funds to invest elsewhere.
Takeaways
- Debt elimination should be your first priority when you are seeking to secure or grow your net worth.
- New sources of income, whether active or passive, offer a direct route to increasing your net worth.
- There are a number of investments you can make to grow your personal wealth. Physical assets such as fine wines and land typically increase over time. Stocks, bonds, and mutual funds will offer higher interest rates than basic savings accounts.
- Higher net worth means more financial security for your family. You can also provide that security by utilizing Home Price Protection as a safeguard against falling home prices.
