Your net worth is a very important indicator of your financial health. To calculate your net worth, you need to subtract all liabilities from your total assets. If you’re wondering how you can boost it, here’s a list of the top assets you can invest in right now.
1. Owning instead of renting
Owning a home is among the most common ways to increase net worth. If you can afford a 15- or 20-year mortgage instead of a 30-year one, you can save a lot on interest. However, sometimes renting makes more financial sense, especially if you live in a high-value urban area. Think carefully before making such an important decision as buying a house.
2. Second Home
Buying a second home can be a good way to earn passive income. You can use it to earn extra money through short-term rental platforms like Airbnb, HomeAway or VRBO. First, you can use that income to pay off the mortgage, and then the house will be a steady stream of passive income if you rent it out and increase your net worth for sure. Not only will your properties gain equity, but the market value will likely increase over time.
3. Retirement Savings
Even if your retirement is in the very distant future, saving now can significantly increase your net worth. You can choose to have tax-deferred accounts like a 401k or a traditional IRA. A great way to maximize your savings is to contribute a certain amount every time you receive a paycheck, even more so if there’s a letter from the company.
Education credentials are, of course, among your most valuable assets. By choosing to invest in education, you open up the prospect of qualifying for a much better job or promotion. Even if you already have a bachelor’s degree, you don’t have to stop there. These classes or certifications can be expensive, but there is an option to get a student loan at 2% interest through Sallie Mae Bank or a lender partner.
This is not very obvious, but good health is an essential asset. If you’re in great shape, you’ll be able to work harder and be more productive. Plus, you won’t have to spend a fortune on medical bills. It’s not difficult either. Just eat well, exercise, and get regular checkups.
6. College Savings
The 529 College Savings Plan is a great option for parents which increases their net worth until it’s time to pay for their children’s education. 529 plans grow tax-free and are also distributed tax-free if you use the money for educational expenses. You can divide them among your children without penalty.
7. Invest in the maintenance of your home
Your home is probably one of your biggest assets, so make sure you maintain it properly, especially if you plan on selling it one day. Also, neglecting your home can cost you dearly in the long run; little things can add up and eventually cost an arm and a leg to fix.
Investing can be a good way to increase your net worth, but remember that it is quite risky. Take your time to do all the necessary research. If you are a beginner in the stock market sphere, you can find a lot of valuable information on the Internet and come to terms with the risk you are willing to take.
9. Household Items
When it comes to household items, you should invest in the best quality because these things last a long time. If you have to pay to repair and replace appliances all the time, it ends up costing you a lot more than buying quality items in the first place. Be sure to read reviews and compare different products before purchasing.
10. Be someone else’s bank
You can get some extra money by giving loans to individuals or companies and earning interest. The main advantage of this type of investment is that the rate of return is consistent, regardless of the value of the underlying asset. Before making an investment, consult a professional.
Collecting things can be much more than a hobby. Collectibles can increase your net worth, especially if you’re an expert. The most promising areas are antiques, fine art or wine. Remember, however, that if a collectible used to be profitable in the past, that doesn’t automatically make it a good investment. This type of investment requires a lot of self-education. Start by visiting antique stores and galleries and talking to experts in the field. Even if you end up not buying anything, at least you learned something interesting!