Your net worth says nothing about your personal value. It does speak to how well your financial house is built and maintained. Net worth takes into account the assets of your household and the liabilities. The assets have value and the liabilities are financial commitments. For example, if your house is paid off it would be considered an asset. A credit card or student loan that has a balance owed would be a liability. People generally don’t talk about their net worth. Some people are even turned off by the idea of talking about it. When it comes to you and your household, you may want to consider a few factors that could vs. will increase your net worth.
People believe different strategies will help them increase their net worth. Some people think they should purchase real estate and use that as their way to increase their net worth. Often these purchases are made with credit and not cash, thus being a liability so it keeps people in debt over the long run.
Some people inherit money from other generations. This doesn’t happen to everyone so it’s not necessarily a wise idea to count on receiving money from relatives as gifts. Most of us don’t really know the financial situation of our elders anyway.
There are even people who say that luck helped them increase their net worth. They were in the right place at the right time. Or they met the right people with the right opportunity. Once again, this is likely to happen to a few people, but not the masses.
If people seek out and get higher paying jobs the increase in income plays a role in boosting their net worth.
The top three factors that increase your net worth over time may not be what you think. Many people attribute their net worth by the VALUES that they have from their upbringing. These values might include being responsible, focused, and hard-working. My dad continued to work hard and get promotions. He was even offered an opportunity to be a partner at a local advertising agency. I learned the value of hard work from him.
The next factor that will have significance towards growing your net worth is investment CONSISTENCY. Many employers offer retirement accounts to employees to encourage team members to save for the future but this isn't the only way to save or invest. It isn’t necessarily the tool you use to save or invest that is important, but rather the repetitive nature of your saving and investing. As long as you are investing regularly and reviewing your investment strategy every 6-12 months, your net worth will see an uptick over the long run.
The last and most important factor that will influence your level of financial worth is FINANCIAL DISCIPLINE. What does that mean? It means being intentional with every single dollar. Telling every dollar where to go before you wonder where it went. I remember my mom being a good example of how to be disciplined with money. When my brother and I were younger, my brother Kevin would regularly ask my mom if we could go out to dinner. My mom used to tell my brother that we couldn’t go out to eat every time he asked. We always went out to eat once a week, but my mom was able to demonstrate discipline in how she spent money. I certainly didn’t appreciate that practice until I was in my late 30s and having to establish my own financial discipline.
As Jacko Wilink says, “every second counts, so make every second count.” https://www.youtube.com/watch?v=yoEv5PxrDvs Begin your new financial discipline today to increase your net worth.