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Steps to Increasing Your Net Worth, Even When You’re Broke

If making ends meet is tough for you, the idea of increasing your net worth might seem laughable. You might be thinking that you’d be happy just to know you have enough money to cover the bills each month or maybe even put a little aside for emergencies; anything more than that can seem like a pipe dream. But what if you found out that this is a goal that is possible for anyone? Even if looking at your bank balance is an exercise in frustration rather than satisfaction, you can increase your wealth with the information below.

Increasing Your Net Worth

What Is Net Worth?

First, before you learn to develop habits that will make you wealthy it’s important to understand this term, net worth. You might already have greater net worth than some of the people around you who look much wealthier than you are. The definition is the value of everything that you own minus the liabilities. Many people are deeply in debt and living off credit cards while giving the impression of having a stable middle or even upper-class lifestyle. 

You might not know from their clothing, their home, or the vehicle that they drive that on paper, they’re broke. Of course, you may also find yourself in a similar situation but with far fewer assets. If credit card debt is a problem for you, keep reading for solutions that can help you pay it off. Your net worth is perhaps the single most important ingredient in financial stability followed by eventual financial independence, so increasing it is critical.

Calculating It

While calculating your net worth appears to be a straightforward process, it can be very stressful for some people. If you’re someone who tends to not open bills until paying them becomes critical or who becomes anxious thinking about money, this can be a difficult exercise, but it’s also a very important one. Remember that doing this calculation is the first step in making this entire subject less fraught and stressful for you because you will be working to build up your financial safety net.

Your assets are not just the amount of money that you have in your bank account. Your employer sponsored retirement account, your vehicle, your home if you own it, items such as jewelry or collectibles and anything else of value that you own should be included. Then, assess what you owe, including student loans, credit card debt, and whatever is remaining on your mortgage to get your net worth. If it’s in the negative numbers, don’t panic. You can reverse that.

Reducing Debt

You need to reduce debt although you don’t necessarily need to eliminate all of it. One reason people do not try to quickly pay off their home mortgages is because they may be able to use that money to get a higher return on investments than they are paying in interest on the home. Debt might also provide you with something that is asset producing, such as a property that you rent out for enough to cover the mortgage and other expenses.

However, in general, credit card debt, medical debt, and similar things are debt is a drain on financial security. Credit card debt can feel particularly overwhelming if the interest rates are high. One option for paying it off is to take out a personal loan instead and use that money to pay it off. The advantage for you is that you can often get better rates with a personal loan. You can review a guide to learn more about this approach. Whatever strategy you use, make a plan and a schedule to pay off the debt that is costing you money.

Building Your Assets

If you’re not building up your assets, you might be spending too much money, or you might not be making enough. Both could also be true. In the former situation, you should start by making a budget, which helps you assess where your money is going and where you’re overspending. In the latter case, looking for a better job or picking up a part time job or gig work can help. You don’t have to have a six-figure income to build up your net worth. Although that can certainly make it easier, there are people who have become millionaires and more on very modest salaries.


Once you’ve created a budget that includes all your needs, the key is to invest your money smartly. This includes diversifying, spreading your investments across a variety of vehicles and types of risk. One great way to free up money to invest is to continue living in the same manner after you get a raise. A retirement fund is a great place to begin investing, but there are other places where you can do it as well. You can set up an online brokerage and start with small amounts, and if you don’t want to be hands on, you can allow a robo-advisor to make choices for you.

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Written by Mark Greene

Mark Greene is writer and life coach dedicated to helping men to perform at peak level. He shares dating advice, style tips and strategies for building wealth and success.