How to Increase Net Worth Growth

The question is , we are not faced with a challenge of escalating prices of goods and services and depreciation of currency. To me , there's always two sides of the coin and so does this situation. Instead of being negative about it , this can actually serve as an impetus for us to optimize our money in hand and grow our overall net worth to achieve our goal of financial independence.

What is Net Worth ?

Net Worth  = Assets (what you own) - Liabilities ( what you owe)

                       

Assets : Bank Accounts, Fixed Deposits, EPFs, Investments 
Liabilities : Loans

 

In order to Increase your Net Worth, we first need to Increase our Assets and Reduce our Liabilities.

The main Question will be HOW?

1. Increase Your Savings

Smart investors don't just save for rainy days but to make brighter days. As the saying goes , income is your most powerful wealth building tools , but we often forget it is also our most powerful net builder tools.

When you savings in increased , so does your capital and so does your investment and hence you will be able to make your money work for you faster and harder.

Assuming you invest RM 1000  on a monthly basis with the rate of return  (ROR) of 8 % for 20 years. You will see that your return will be RM 549,144. ( click here for compounding interest understanding )

Smart investors need to constantly saves and challenge themselves to continuously increase their savings rate while keeping check on their lifestyle inflation in order to achieve financial freedom in the shortest time possible.

2. Increasing your Rate of Return ( ROR)

A return that constantly gives you a 8% will trump over a plain vanilla FD of 3 % over  year.

Investors also need to take into the account that , the higher the return the higher the risk which leads to our no 3
.

3. Manage and know your risk 

Investors need to strategies to diversify your investment portfolio in order to mitigate any risk of losing what you have accumulated.

Risk can be managed if you know what you are investing in and what kind of risk exposure are related to the selective investment you are investing in.

4. Decrease Cost

Cost = Financing rate , unnecessary insurance policies , etc.

I hope that this blog and information helps you to have a better planning understanding on how to increase your net worth grow in order to achieve your financial goals.

For more information on the different asset classes of investments and different terms of investments in terms for short to long, or any financial goals planning feel free to drop me a message at 


charissim.ristyle@gmail.com