By producing income from your investments such as stocks, bonds, mutual funds, and real estate.
Net worth is what you have left over after subtracting your liabilities (what you owe) from your assets (what you own). To grow it, you must reduce your liabilities and grow your assets. Growing your net worth is the foundation of any solid financial plan; so let the measure of your personal net worth drive the actions you will take to achieve your financial goals.
For example, your plan might be to increase your net worth by $5,000 this year by purchasing investments and making payments on your car loan.
Now it’s your turn. Track your net worth using a net worth tracking tool like MeVest’s Net Worth Tracker (right sidebar).
We’re all unique, so naturally your financial plan will be different from the next woman’s plan. No matter what your goals and current finances look like, though, you’ll know you’re on the right track if your net worth is going up every month.
Stay tuned because next week I’ll be writing about how to automate your plan.