In terms of finances, you might be focused on various numbers such as your savings account, checking account, retirement account and your trading and investing accounts. Or you might be concentrated on your credit card debts, mortgage, or student loan, not to mention your income and your expenses. These numbers are all vital in order to better understand your financial health as a whole. However, one particular number will determine how successful and fruitful you are when it comes to building your future assets, this is your net worth.

Net Worth – What Is It?

Net worth is the difference of the worth of what you own, for instance your house, investment accounts, or retirement funds, minus certain liabilities such as credit card debts and mortgage. Your net worth is a crucial number as this could aid in determining how much your liabilities and/or debts can influence your wealth in the future and underscore the areas you need to concentrate on prior to your retirement.

Individuals with high net worth represent only under 1% of the total population of the world. However, when their wealth is combined, this would account for over 40% of the total wealth of the world.

A high-net-worth individual or HNWI is an individual or a household that has liquid assets that goes over a particular figure, typically $1 million and over. The term HNWI is usually used in the industry of financial services. While there isn’t any accurate definition as to how wealthy a person should be to be included in this category, in general, high net worth is quoted with reference to liquid assets of a certain figure. But the precise amount would differ from one financial institution to another but can span from individuals with a net wealth that is 6- to 7- or figures or more.

Ways To Increase Your Net Worth

If you want to calculate your net worth, you need to look into and count up everything that you own which includes your assets in your 401(k) and investments. Create a separate list and add up of all your outstanding balances that you owe. Deduct the total amount of your outstanding balances from the total value of everything that you own. The difference will be your net worth.

So, were you pleasantly astonished by your net worth or were you expecting it to be a bit higher? Don’t fret as there are some things that you could do to grow your net worth.


Have a comprehensive look at and asses all your liabilities. Know how much owe you every month and check if there are liabilities that you could reduce or perhaps eliminate. Cutting down your debts could greatly help in growing your net worth.


You may know what assets you have, but not know how much they are worth combined. Review all of your assets to get an estimate amount. Your major assets would be your primary residence, vacation home/s and/or rental properties, your investments as well as valuable collectibles or collections.


The less your expenses are, the more wealth you can amass in net worth. Do a budget review to see your current expenditures and check where you can trim down your expenses, whether big or small. For instance, cancelling magazine subscriptions or getting rid of one or two cars if you have multiple as this will greatly cut down your expenses on car payments.


Settling your mortgage the soonest possible time will definitely increase your net worth as this is one of the biggest liabilities.

When it comes to growing your net worth, it is about making use of an effective and efficient strategy which is designed to tackle every area of your financial plan. By formulating a strategy and making it work altogether, you could steadily increase your net worth.