A lot of people still do not understand the idea of net worth and what it is.
In a very simplistic way, I can tell you that to get to your net worth, you add up all your assets- liabilities equals your net worth. Your assets may include -Savings, home value, car value, jewelry, retirement accounts, stocks, bonds or any priced possession with value e.g. paintings etc. Your Liabilities may include credit card debt, home mortgage, car payments left on your loan, Student loans, home equity loan/line of credit etc.)
But why would you want to know your net worth? Because it is a great way to measure your financial standing and understand how you are able to plan for your future. If you search and google net worth, there are many ways and tons of advice on how to grow your net worth and would even tell you how much your net worth should be at a certain age or milestone in your life comparing people your age group or so. But is this really important? My take on it, yes, it is good to know the baseline as to how much wealth you are supposed to have for your age but also remember there are many factors affecting each persons net worth and how much you really require for retirement or to plan for the future. I say focus on what your goals are and understand how much you would like your net worth to be.
There are many ways to grow your net worth but here are great ways to grow them with ought doing a whole lot of legwork.
1. Buy a house- great way to build equity (contact me I can help you buy your first home)
2. Lessen your debt- only buy what you need and refrain from too much spending
3. Automate your savings by saving a percentage of your income towards retirement
4. Invest your extra cash such as tax refunds to buy stocks or bonds
5. Create a plan/milestone to reach your goal
Building your net worth is really a mindset and if you have not taught about it, its time to re frame your way of thinking to building your wealth overtime. If you have a negative net worth, start making them a positive one by making small steps to lessen your debt. However, you plan to build wealth down the road, remember to focus on your goals, after all money may not make us happy but financial freedom gives you the peace of mind you need and eventually leads to success and happiness.
What’s your net worth? Drop me a message.