How to increase your networth

Networth is what is owned minus what is owed. Net worth is the value of all assets, minus the total of all liabilities. If your assets exceed your liabilities, you will have a positive net worth. It is the value of a person’s wealth including their income and total assets after subtracting one’s debt. The combination of what you own (your assets) and what you owe( your liabilities) makes up your personal net worth. Calculate your net worth now and recalculate it once or twice a year. It lets you understand your current financial situation, gives you a reference point for measuring progress toward your goals.

Know, Identify and list your assets, estimate the value of each and add up the total. Know, Identity and list what you owe, subtract your liabilities also known as debt which includes items like mortgage, loans from your assets such as cash in your check-in savings, retirement act; items as cars, property.
Positive net worth means your debts are lesser than your assets. Negative net worth means your debts are greater than your assets. Basically, the formula is Assets – Liabilities = NET WORTH.

Liquid net worth is the amount of cash investments and other liquid assets that you have. In the financial world, liquid means readily able to convert into cash or cash-like instrument. Illiquid net worth, looks at non-liquid assets like real estate, rental property, new car, assets not readily accessible and convertible into cash.
Your income is not included in a net worth calculation. An individual with a big pay check can still have a low net worth if they spend most of their money. On the other hand, an individual with modest income can accumulate significant wealth and a big net worth if they buy appreciating assets and are prudent savers.
Live below your means. Control your spending. Create a financial plan and save as much as you can. Reduce debt, save more, invest wisely. To increase your net worth, there are several ways to achieve this. Lowering debts, reducing debt burden. This is a strategy to increase your net worth. Therefore realizing returns on the interest you do not pay. Debt causes the size of one’s net worth to be negative. Pay off all your debt, ensure no penalties are applied for early or frequent payment.
One of the best ways to increase net worth is through smart investment. Buying a house you can afford or renting in a location that fits comfortably into your budget, keeping extravagant expenses low.
Create emergency fund that can help you stay financially afloat without having to rely on any other money.

Invest in yourself. Invest in your health, mental being, financial health. When your self worth goes up, your net worth aligns. Start Now.