Are you looking for strategies for increasing your net worth? You’ll read a lot of blog posts out there purportedly offering “strategies” but then just give you the same old standard advice with absolutely ZERO specifics.
One blog I read on the subject, one that specifically used the word “strategies” in the headline, offers pearls of wisdom like this:
“It takes more time to make money than to spend it.” But wait, there’s MORE:
“…the easiest way to grow your bank account is NOT to spend it all.”
Well, that’s ME sorted. All I had to do was take the world’s most basic and obvious advice, relabel it a strategy, and INSTANT MILLIONS. In case you’re wondering, there are other tidbits you might never have thought of doing, like taking this advice from the same blog:
“…read a book like A Random Walk Down Wall Street.” And then some encouragement to read Investopedia. The same blogger also advises you to “avoid personal debt”. Which is sound advice but is DEFINITELY NOT a strategy of any kind.
The word “strategy” implies a plan with specific steps. So when you read a blog post titled “Five Strategies For Increasing Net Worth” you really ought to get five actual PLANS to do this.
Make no mistake, I am being really harsh on a blogger here, but some of the info in that blog post was actually good advice. It just was nothing at all resembling a strategy.
And I hate to say it, but if you read MY headline looking for FIVE strategies–five actual plans–for increasing net worth? We haven’t got the room for something that long here. But I will give you five steps that can help you CREATE a strategy to increase your net worth.
Step One: Review Your Finances And Credit
Anyone who wants to improve net worth needs to be literate about their own finances. Start by getting your free credit report (guaranteed by federal law) at AnnualCreditReport.com, which is the only site authorized by the Federal Government to provide these services.
Know the contents of your report, your FICO score, and be sure to look for errors or other problems. You will encounter difficulty increasing your net worth if you don’t respect your credit report.
Step Two: Review Your Income and Available Time
Are you currently earning only a single paycheck each payday? It may be time to investigate side gigs, and learn how to generate multiple income streams. The key is to determine how much time you have to invest in getting a side gig, second job, creative outlet that can generate revenue, etc.
You can’t succeed at a side gig if you have not time to dedicate to it; your priority will be determining how much time you can invest and still maintain a good work/life balance. Best advice? Ask someone who already working their side gig, and do some research into how crowded the workforce is in your area (in the jobs you might consider doing on the side).
Step Three: Review Your Income Potential
Side gigs are great, but choosing the RIGHT side gig or secondary income for you is crucial. Are your skills creative? You might put yourself to work using your musician skills, artistic abilities, or even use your know-how to act as a consultant. But first, you have to know how much time you have to devote to these pursuits. If you are already in a high-impact, time-consuming career field, a side gig may not be the right choice.
The best way to evaluate yourself in this area? Ask yourself what you are already doing, passionate about, and actively interested in. Then research those angles online as potential income-generating activities.
Make a list of these, and try to narrow down the ones that would translate into income and which might not be suitable, side-gigwise.
Step Four: Get Some Financial Advice
All of this prep and homework is great, but what about talking to someone who has the benefit of having done all this already?
A financial planner, wealth advisor, or CPA might give you some amazing insights–you should try to connect with someone who has personal experience doing what you want to do to raise your net worth. Even an experienced co-worker or friend could lend insight.
Step Five: Find Some Examples Of People Who Did It Right
I don’t just mean find an example of someone who increased their net worth. I am talking about finding someone who has taken a very similar journey as you are considering–if you are thinking of opening a consulting business, talk to people who have done EXACTLY that to increase their net worth. Ditto for those who work as artists or musicians.
Get the benefit of other people’s SPECIFIC and DIRECT experience as it’s relevant to your needs. That is an excellent way to learn fast and avoid mistakes those folks have already made before you.
Joe Wallace specializes in personal finance, military affairs, and consumer protection topics. Since 1995, his work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and collects unusual vinyl records, which gives him an excuse to write the vinyl blog Turntabling.net.