One of the steps to financial success is increasing your net worth. Find out the measures you can take to maintain a positive net worth.
According to Forbes, the net worth of Mukesh Ambani, Founder and Chairman of Reliance Industries, was US$ 93.8 billion as on 15 February 2023. Like this example, we've heard of some actor, businessperson, or politician with a net worth of XX.
What does 'net worth' mean? What is its role in your financial success? Let's find out:
Meaning of Net Worth:
Net worth is the total value of the assets held by an individual minus the liabilities. Net Worth = Total Assets - Total Liabilities
Here, assets can include bank deposits, stocks, bonds etc., while liabilities refer to loans, credit card debts, etc. A high net worth implies strong financial strength, whereas a low one will mean weaker financial strength.
Knowing your net worth is important, as it gives you a perspective on your financial situation. Monitoring your net worth regularly is critical as this will help you to achieve financial success. You will know you are on the right track when you see positive growth in the figure.
A negative net worth, on the other hand, serves as a caution and calls for successful financial planning.
Tips For Financial Success
Don't worry if your net worth isn't where you want it to be. There is still time to change that. Here are some measures that we think can help you become financially successful.
Don't Spend More Than You Earn
Although this sounds obvious, we may know many people who neglect to keep an eye on their expenses. The desire for a lavish lifestyle sometimes results in spending more than one earns monthly. This translates to racking up debt or dipping into savings for extravagant purchases.
One of the key tips for financial success is to keep spending in control even when income or earnings increase. Successful financial planning helps to increase your savings and grow your net worth. Achieve success with money by using Jar App.
Be Prepared For the Unexpected
Medical emergencies or incidents like a car breakdown can put a dent in our savings if you don't have an emergency fund. To ensure you don't face any bumps on your road to financial success, you must maintain a savings account with enough funds to cover at least 3 to 6 months' worth of bills and expenses.
Hire a Financial Expert
You can benefit from the help of a financial advisor. They can recommend strategies for financial success upon reviewing your assets and liabilities. The expert can objectively view your finances and suggest various investment avenues.
You must clearly state your intention to increase your net worth, and the expert will help you establish financial discipline.
Manage Your Money Wisely
Do not let your money remain idle in your account. To be financially successful, it is important to invest. There are various investment avenues you can consider parking your money. If you aren't sure how to get started, you can talk to a financial advisor, who will help you create a roadmap to financial success.
To make the journey easier, use Jar App to automate your success with money.
Pay Off Your Debts Early
There are many benefits to paying off your debt early. You can save more every month and invest in instruments to help you reach your financial goals. Additionally, your credit utilisation ratio decreases when you pay off your debt. This reduction improves your credit profile.
Before repaying your debts in full, remember that creating a successful financial plan is vital. List down all your current debts and focus on repaying those debts with the highest interest in full. This is one of the strategies for financial success.
Increase Your Income
If your current earnings are not helping you improve your net worth and your boss refuses to raise your pay, there are other steps that you can take. Your exploration can include getting a second job, renting a room, finding out if you can claim any further tax benefits, etc.
How Much Should My Net Worth Be?
Never make the mistake of comparing your net worth to that of a celebrity. This will not do any good. Your focus must be on how much you can improve your net worth by the following year. To do that, you must get familiar with your current net worth.
Then, work out a percentage difference you would like to see by the following year. Incorporate the above tips for financial success if you are struggling to save and/or have pending debts.
Remember that it may take some time to see a positive net worth if you have only recently started out in your career. However, continue incorporating the above measures, and you will be on the road to financial success. If you still don't see any improvement, it may be time to change your choice of investment instruments.
Finding your net worth and creating a successful financial plan can help you achieve financial success early in life. However, seek the assistance of a financial advisor if you aren't familiar with the steps you need to take.
In conclusion, keep in mind that anyone can ensure sound financial health. All it takes is a little discipline, and you're on your way to being financially successful. You can only reach your goal when there is a plan and abide by it. You can automate financial success with Jar App.
Follow the above tips to financial success, and you are all set for a better financial future.