Finances & Debt

How to Increase Your Net Worth

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The concept of “net worth” can be a relative term, based on your personal values, financial goals and where you’re at in life. Starting in their 20s, most people are working to complete their education and enter the workforce as they begin to establish their career, and few are thinking about increasing their net worth. It’s often a time to secure an income and make connections with other people in the industry for long-term stability.

Flash forward to your 30s, and it’s important to begin thinking about the future and establishing more wealth to ensure that you can continue to grow your finances. If you’ve wondered about the possibility of achieving a high net worth as you enter your 30s, there are a few important steps to take for long-term success and stability. But first, let’s learn how to calculate net worth.

What is net worth?

Each person in every economic class has a net worth. According to, it’s essentially defined as adding up the assets you own (e.g., personal property, stocks and bonds, money in bank accounts) and subtracting what liabilities you owe (e.g. mortgages, credit card balances, auto loans). In many cases, you can use an online net worth calculator to help you reach this figure.

Additionally, your net worth is essentially an insight into your financial health. And a sign of good financial health is if the assets are growing faster than the debts, or “positive net worth.”

Average net worth by age

It’s important to begin growing your USA net worth in your 30s to secure your financial future, hopefully bolstered with a career that is now established. According to the Federal Reserve, the median net worth for adults younger than 35 years old is $13,900. That’s compared to the median net worth of adults age 55-64, which is $212,500.

How does net worth affect me?

Many people are unaware that their net worth has an influence on their investments and can allow their wealth to increase with time. With a high net worth, you will have more money to put toward various investment accounts. Plus, with the potential for compounding interest, you can earn interest on the original amount you’ve saved, and then you continue to earn interest on the interest, all helping to grow your investments over the years. If you have a negative net worth, it can be impossible to set aside money to invest and grow your wealth.

How to increase net worth

Hire a financial expert.

An essential part of increasing net worth is enlisting the help of a financial professional who can offer an objective view of your finances. A financial adviser will help keep you aware of market performance without becoming emotionally invested, and is someone who can be more critical of the investments that you own. They’ll expose your portfolio to different types of investments that you may not be familiar with, while offering a second opinion based on their training and experience. The financial adviser will also assist you with setting specific long-term goals with your finances and help you establish fiscal discipline by building accountability and awareness.

Invest over time.

One of the most effective ways to attain a high net worth is to begin investing, which allows your money to grow steadily through the potential for compounding interest. Although you may assume that investing is only for the wealthy, you can still invest with a small amount of money to get started. Mutual funds typically provide an opportunity to invest in stocks and bonds with a single transaction with a minimum amount of money that is required. You may need to put down $500 to $5,000 to begin. Although this may be difficult to afford in your 30s, there are some companies that will waive the minimum fee if you begin to make automated investments of $100 to $500 each month. To achieve success with your investments, resist the urge to check the accounts too frequently. This will make it easier to avoid making quick decisions based on your emotions. It’s also important to automate the investment process as much as possible, such as using a rebalancing feature, which makes adjustments to your asset allocations on an ongoing basis.

Financial experts also recommend diversifying your portfolio to reduce your risk of loss in tough economic times and maintain a stable net worth. Invest in three or four companies that you purchase goods or services from and are familiar with in your everyday life. You can also add fixed-income funds or index funds for a long-term diversification investment that can protect your money. Continue adding to your investments on a consistent basis with the profits that you earn and remain updated on the current market conditions. Keep in mind that you should only invest what you can afford to lose and the amount that you risk shouldn’t keep you awake at night. It’s not too late to get a head start on planning. 

Pay off debt.

One of the most common inhibitors of growing your net worth is by maintaining a balance with the cumulative debt that you owe and eliminating it from your balance sheets. From student loans to credit card debt, it can be easy to have your finances suffer by merely making minimum payments each month and losing money on the interest tacked on to loans and credit card balances year after year.You should enter your 30s with your student loans already paid off to ensure that you can begin making contributions to an investment vehicle such as a 401(k) plan or IRA (Individual Retirement Account). Make it a goal to increase your net worth by 25% each year of your income. By the time you reach retirement, your ultimate goal would be a net worth that consists of all assets without any liabilities. If you have a negative net worth, paying off your debt should take priority over building your savings account. If you have a healthy net worth, you can begin to focus more on saving and investing instead of zeroing in on paying off your mortgage.

Build an emergency fund.

After spending a decade in the real world during your 20s, you’re now well aware that unexpected costs come up throughout the year. From car repairs to visits to the emergency room, you may not plan to pay extra for a bill that isn’t factored into your budget. To avoid using your credit card to pay for the expense, opt for saving $1,000 in an emergency fund that can be used when it’s absolutely needed. This can protect your savings account and can also allow you to avoid accumulating more debt and paying extra in interest. Once you’ve used the money, make it a top priority to get the emergency fund back to $1,000. By consistently saving a little each month, your emergency fund will build over time.

Become more frugal.

When you want to learn how to build net worth, you’ll need to reduce your spending and live a more frugal lifestyle to ensure that you have more money to put into your savings account and investments. You may not have a lot of control over your income, but you can control how much you save each month. Avoid eating out throughout the week and cut off your cable television or magazine subscriptions. You can also rely on using cash to pay for goods or services, which is proven to lead to less spending on impulse purchases.


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