Your net worth is the sum of your assets minus your liabilities – if you’re not sure what yours is, grab a pen and paper and a calculator right now and work it out. It’s simple – in one column, put down any assets such as property, savings and valuable items such as car, and in the other any debt or mortgages – subtract from your assets, and voila, that’s your net worth! Don’t be scared if you’re looking at a negative number – this is common for younger people, but no matter what your age, it’s never too late to start building your net worth up to a more appealing figure.
It’s easy to see pictures of high net worth individuals such as Peter Hargreaves (net worth: £2.3 billion), Tej Kohli (net worth: £4.5 billion) and Maritsa Lazari (net worth: £1.7 billion) in the press and assuming that joining their ranks is impossible – but we’re all just one genius idea and a lot of hard work away from making our fortunes. And working on increasing your net worth little by little is the first step to realising your dreams of wealth. Here’s how to go about it!
Step 1 – Ask for a Pay Rise
The quickest way to increase your net worth is to improve your income – and don’t ask, don’t get, baby. Asking your boss for more money can seem frightening, but if you’re working hard and doing well, there’s no reason to wait for an annual review – chances are, your boss will respect you for valuing yourself, whether or not they feel able to honour your request.
Step 2 – Get a Second Income
If you’re serious about improving your net worth, consider trying your hand at freelancing or moonlighting to earn a bit of extra cash – would you really feel so sore about giving up your Sunday if it were helping you to work towards a better future for you or your family? If you don’t feel happy about sacrificing your precious time off, bear in mind that extra income can come from many sources. Sselling off some clothes you don’t wear any more perhaps, or turning your baking hobby into a bespoke cupcake business. If you love gardening, why not take on a bit of landscape work, or if people in the gym are always asking how you got your biceps, why not offer to train them for a fee? If you’ve got a skill, you’ve got a way of making extra cash.
Step 3 – Make Cash Cutbacks
The old adage that you’ve got to spend money to make it isn’t always true – and particularly not when you’re trying to increase your net worth. Unless you’re investing in something that will increase your value in the long term, like education or vocational training, you should be trying to conserve as many pennies as you can – so stop eating out, don’t buy that second pair of shoes or that flash watch, and watch your money grow.
Step 4 – Make Sensible Investments
Once you’ve got some money saved, you should be putting it out there and making it work for you – you don’t need to take high-risk investments or play the stock market. Something as simple as putting your savings into a savings account with a good interest rate, rather than letting them stagnate in your main account, can help to improve your net worth – so open a savings account, invest in an ISA, and make sure you work at paying off any debts that are sapping your income.
By following these simple steps, you can slowly transform the health of your bank balance, increase your net worth and improve your quality of life – so be brave, be diligent, keep saving, and watch your money grow.