Track Your Current Net Worth
Net worth is calculated by subtracting your total liabilities from your total assets. Start by listing all bank accounts, investments, retirement balances, real estate, and vehicles, then subtract all debts such as mortgages, student loans, and credit card balances. This baseline helps you measure progress over time.
Increase Income and Reduce Expenses
Boosting income through career advancement, side work, or skill development creates more money to save and invest. At the same time, lowering unnecessary spending frees up cash flow. Consistent surplus income is the foundation for building wealth.
Invest Consistently and Reduce Debt
Regular contributions to diversified investments, such as index funds, help grow wealth over time through compounding returns. Prioritize paying off high interest debt, which can erode net worth. For more on building wealth, see the Investor.gov guide.
