5 Ways to Increase Your Net Worth

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What is “net worth?”  Your net worth is calculated by adding up all your assets (what you own) and all of your liabilities (what you owe).  Then you subtract your liabilities from your assets and you have your net worth.  Net worth is an important metric to assess your financial health at a point in time.  It is also a useful tool for measuring your financial progress over the years.  A negative net worth indicates that you are living beyond your means: you owe more than you own.  We should all strive to increase the value of our assets over time, and decrease the value of our liabilities.

If you are striving to increase your personal net worth, here are some ideas towards that end.

Pay extra on your mortgage

If you own a home, it is likely your largest asset.  It is also quite likely your largest liability.  By paying extra each month and applying the payment to the principal you owe, you will whittle down your liabilities.  Hopefully the value of your house is growing, and, as a result, your asset value is growing.

Don’t buy depreciating assets

Cars, boats, and other large assets typically don’t appreciate in value.  When you spend money to buy the asset, the asset immediately starts to lose value.  While it is unreasonable to think you will never buy a depreciating asset, like a car, be mindful that buying a car with a loan is a double-whammy against your net worth.

Increase your retirement savings

If you work for an organization, meet with human resources and ratchet up how much you are having withheld from your check for your retirement account.  If you are currently contributing 4%, for example, increase it to 5%.  You won’t miss that extra bit from your paycheck, and this will start building your assets faster.

Pay down credit card debt

Do what you can to cut expenses, so you can increase what you are paying on your credit cards.  Paying only the minimum payment on your cards is not ideal.  Pay an extra $10 or $20 or whatever you can manage above the minimum payment.   Be vigilant and increase the amount you remit as often as you can.  This will help you decrease a liability, and therefore your net worth will grow.

Increase other savings

What other saving goals do you have?  Do you need to increase your emergency savings?  Commit to an increase in the amount you are earmarking for savings.   Remember that every little bit counts and increasing your savings will increase your net worth.


There you have it, five ideas you can implement to increase your net worth.  Easy peasy, right?  No. But these are ideas worth considering.  Being responsible with your money is sometimes difficult, but the end result is worth it:  you will have peace of mind knowing that you have a stable foundation.


Want to craft your own net worth statement?  Use my handy template to get started.

What ideas have you used to increase your assets and reduce your liabilities?  Comment below or join the free SimpleMoney Community on Facebook to share your thoughts!


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*This is an update to a post previously published in 2018.

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