Regardless of whether your net worth is in the red or you are worth millions of dollars, we can all begin increasing our net worth by making some pretty minor changes in how we spend our money. Interested to hear more? The following are nine simple ways to increase your net worth starting today.
Do you know how much you actually have in the bank? Do you know how much you earn and how much you spend each month? If not, it’s time to be more attentive and start checking in on your finances. At the very least, an annual check-in is necessary. Every six months is obviously a better option and, if you really want to take it seriously and keep up to date with tracking, once a month is the best option. To track, make a list of your key investments and the accounts that are holding those funds. Record other equities such as property, cars and any expensive jewelry that you own. Track your debt and how much you’re spending in interest rates and fees. Make notes on the months where you see a notable jump in numbers so you can look back and see what has contributed to that increase.
Sell Your Life Insurance Policy
If you no longer want life insurance coverage, you may be able to sell your policy to a third party. Life settlements, as they are commonly known, involve selling a policy for a cash payout to an entity or person and not the company that initially issued the policy. These settlements have the potential to gain 10% (or more) annual fixed returns with low risk. It’s always a good idea to use a calculator from APEX Settlements to see if you qualify to sell your policy and what its value may be.
Make the Most of Tax-Advantage Investing
Do you have a 401(k)? If yes, you may be able to increase your net worth by making the most of tax-advantage investing. What do you need to do? Put the highest amount you can into your 401(k) each year so you hit the maximum contribution threshold. Each dollar you invest in your 401(k) is a dollar less that you’ll have to pay tax on.
Eradicate Your Debt
You’ve got a lot of work to do if you’re in debt and you want to grow your net worth. Start by working out ways that will leave you debt-free. Can you pick up a side hustle to pay off bills? Are you in a position to pay off all credit cards? Can you and your family members survive sharing one car instead of having three parked in the driveway? The whole goal is to get out of the red, grow your savings and investments and benefit from the compounding interest on those accounts. The sooner you can eliminate debt, the better as this could be the difference between adding hundreds of thousands of dollars to your net worth in the long run.
Sell Everything You Owe Money On
To really accelerate your net worth, you need to sell everything you owe money on. Do you owe $10,000 on a car? Get rid of it and buy one for $5,000. Are you paying back a loan on an RV that you only use once a year for a short vacation? Sell it and take the car on a road trip instead. Nothing will push the needle into the green faster than selling off the items you owe money on. Just remember – everything you own should be making a return for you and not draining your pockets.
Ask for a Raise
Increasing your income will be a massive help in getting you where you need to be financially. But don’t just walk into the office of your boss and ask for more money. Show your value at work and ask your boss if there are any other responsibilities or over-time you could take on. Then, prove yourself. If you take on extra responsibilities, prove that you’re reliable and indispensable. If you take on over-time, prove that you’re a good candidate to take on even more hours if they’re available. Approach your boss after a few months and then ask if there’s a possibility of getting a pay increase. Tell him/her how much you want to be a part of the company’s growth and success. If you get nowhere, it may be time to consider looking for another job that will pay higher wages.
Look for A New Job with More Earning Potential
We’re not saying quit your job and go looking for another position. If the situation is desperate and you’re never going to receive a pay increase, despite knowing there are other positions out there that do pay more, it might be time to start looking elsewhere. But remember; don’t make any rash decisions that are solely based on pay as, ultimately, you want to be happy where you work too.
Invest in Maintenance Rather Than Repairs
Be more vigilant when it comes to keeping appliances and systems in your home working properly. Schedule a yearly visit from your plumber, electrician and HVAC repair and have them service your systems and appliances. Keeping your home well maintained will ensure you save hundreds (maybe even thousands) of dollars on emergency repairs and replacements. Apply this same idea to your car and you’ll save even more.
Never go to the grocery store feeling hungry without a list. That’s rule number one. Rule number two is to always bulk buy when items you use are on special offer. We’re specifically talking about perishable food items and toiletries such as toothpaste and shampoo etc. Doing so will save you hundreds of dollars each year and you’ll enjoy the peace of mind that comes with knowing you don’t have to buy specific items for a couple of weeks/months. Check online to see what items are coming up on special offer in your favorite stores so you can plan for those purchases.