Let’s face it, we can’t all be Scrooge McDuck, and not just because he’s only a cartoon. The reality is that most people will never be rich, and becoming rich is largely out of our control. 😭 But fear not, fellow peasants, there is hope! 😁
To have a wonderful lifestyle you really don’t need to be rich, you just need to have a solid Net Worth. Fortunately for us, these are very different things! Even better, having a high Net Worth is attainable no matter what your income level is.
This is such a great topic that we’ll throw in a bonus 6th fact!
Here are Six Fast Facts about Net Worth:
- 💲 Net Worth For $100, Alex - Net worth is pretty simple to figure out. It’s the value of your stuff minus the amount of debt you have. Think of it like this: would you rather have $1 million and owe $2 million, or have $100k and owe nothing? Yeah, us, too!
- 🏠🚗 Stuff? What Stuff? Your net worth is based partly on the stuff you have. Sure, it includes things like stocks, your home and car, collectibles, and so on…but it’s much more, too. It’s also smart investments like using your company’s retirement matching (free money!), keeping your savings in accounts that earn interest (free money!), and some kinds of life insurance that can build value and be used before you die (free money!). Note the theme here…
- 🚫 Dump The Debt - The other half of the net worth equation is your debt. Credit cards are killer, as are things like luxury cars, enough shoes or purses to equip a whole cast of Real Housewives, and sizable Starbucks addictions. It’s not that these things are bad…just expensive! And we tend to take on debt to get them, which is the problem.
- 🤔 Decisions, Decisions - Your decisions are critical in building your Net Worth. Use cash whenever you can. Monitor your own spending (literally every penny of it) for a couple weeks to see where you’re spending it all; you don’t have to cut things out, just see about reducing a bit. Chances are good you’re spending money without even realizing it! Drive a car long enough to pay it off. We know, it’s SO much less fun that way, but Future You will really appreciate a little bit of discipline from Today You.
- 📈💰 Build That Bad Boy - To really throw fuel on the Net Worth fire, think about building new income streams. These don’t have to start out huge, but they can provide huge benefits over the long term. Things like renting out any extra living space on AirBNB, owning your home rather than renting, and other side hustles can help you pay down debts and then provide steady additional income. A few years of that, and you’ll be able to treat yo’self guilt free!
- 🎓 Git You Some Learnin’ - Invest in your own education! People with a Bachelor’s degree earn an average of almost $16k per year more in their 20s and 30s than people without one. That’s literally over $1 million over the course of a career! And that’s just an across-the-board average; for many jobs it’s much more than that! Makes it worth doing a couple more years of homework, huh?
🔥Bottom line: If you need help getting started, talk to an advisor or financial planner to get yourself on the road to high Net Worth. We can’t all be rich, but some good decisions, planning, and discipline can result in any of us having a Net Worth that means a whole lot of freedom to enjoy life!
What’s the best financial advice you’ve ever received?
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