Now that you’ve calculated your net worth, you’re probably excited about seeing that number go up, and once it starts going up, you’re going to want to see it keep going up, faster and faster, rocketing to the sky.
For my net worth growth, I have a goal of a 3% increase per month in the year, which amounts to a 36% increase over the course of the year.
Here are the nine methods I plan to use to increase my net worth growth. I recommend focusing for a while on each item before moving onto the next one.
1. Pay off all debts, starting with high interest ones
Start doing this during the year by paying off all high interest and non-interest debts.
2. Maximize employee matching of retirement investments
You should claim every single naira that your employer offers you as a matching amount in your retirement account. If you don’t, you’re basically telling your employer to keep part of your salary and actively choosing to stunt your net worth growth.
3. Trim expenses
The key here is to eliminate “bad” expenses: ones that won’t do anything to increase your net worth. For example, lunch at fast food outlets is almost always a bad expense, as is extra clothes shopping and almost every electronics purchase. Cut out these extra expenses from your life and suddenly the margin between your income and your expenditures becomes a whole lot fatter. That margin is your net worth growth, and you just made it bigger.
4. Keep money you’re not spending in a place where it earns
Your savings account should be earning a bare minimum of 3% per annum. If you’re not earning more than that, you’re denying yourself some automatic net worth growth. Also, you should find out if you’re eligible for a high-interest current account, like the GTMax account ( a product of Guaranty Trust Bank Plc.), which offers a higher interest than the savings account. A minimum balance of N150,000 is required for this account.
5. Start a portfolio
Once you’ve built up an emergency fund, you should consider starting an investment portfolio. Once you begin to accumulate a lot of money in savings, investing is the next logical step for helping your money grow.
6. Reinvest income from investments
Once you begin investing, you’ll find that you may receive income from these investments, such as dividends. Instead of pocketing that money, roll it back into the investment until you have a real reason to take it out. It’s just more net worth growth acceleration. Intercontinental bank offers a savings account with the features of a current account. You can deposit your dividend warrants in such an account till you really need it.
8. Invest all windfalls
If you suddenly get a windfall due to an unexpected gift or an inheritance, don’t think about buying a flat panel television or an Hummer Jeep. Invest that money as soon as you can. You can start buying such perks when your net worth is growing at a rapid pace by itself. I like the campfire analogy: if you’re trying to start a campfire and someone hands you some wood, are you going to use it to build the fire or are you going to whittle yourself a new toy?
9. Pay for things only in cash
If you can’t get your hands on the cash to buy something, wait until you can. This includes everything short of a new home, including automobiles.
If you follow these rules, you’ll watch your net worth slowly begin to accelerate and take off like a jet going down the runway and lifting into the air.
Did you like this article. Please drop your question, comments and feedbacks. Your comments will be posted here.