Your net worth is a very important indicator of your financial health. In order to calculate your net worth, you need to subtract all the liabilities from your total assets. If you’re wondering how you can boost it, here’s a list of the most important assets you can invest in right now.
1. Owning instead of renting
Owning a home is among the most common ways to boost 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-priced urban area. Think everything through before making such an important decision as buying a house.
2. Second Home
Buying a second house can be a nice way to have a passive income. You can use it for earning extra money via short-term rental platforms such as Airbnb, HomeAway, or VRBO. First, you can use this income to pay off the mortgage, and then the house will be a steady stream of passive income if you rent it out and a sure boost in net worth. Not only will your properties gain equity, but also the market value is likely to increase over time.
3. Retirement Savings
Even if your retirement is in a very distant future, saving right now can increase your net worth significantly. You can choose to have tax-deferred accounts like 401k or a traditional IRA. A great way to maximize your savings is to contribute a certain amount each time you get a paycheck, even more so if there’s a company match.
Education credentials are of course among your most valuable assets. When you choose to invest in education, you open up a prospect to qualify for a much better job or a promotion. Even if you already have a bachelor’s degree, you don’t have to stop there. These classes or certifications can be costly, but there’s an option to take a 2 percent interest student loan through Sallie Mae Bank or a lender partner.
This isn’t too obvious, but good health is an essential asset. If you’re in tip-top shape, you can work more and be more productive. What is more, you won’t have to spend a fortune on medical bills. It’s not difficult, too. Just eat well, exercise, and have regular check-ups.
6. College Savings
529 college savings plan is a great option for parents, which boosts their net worth until it’s time to pay for their kids’ education. 529 plans grow tax-free and they are distributed tax-free as well if you use the money for educational expenses. You can divide them between your kids without penalties.
7. Invest in Maintaining Your Home
Your home is probably one of your biggest assets, so make sure it’s maintained properly, especially if you’re planning to sell it one day. In addition, neglecting your house can be very expensive in the long run; small things might pile up and eventually cost an arm and a leg to fix.
Investing can be a good way to increase your net worth, but you should remember that it’s quite risky. Take your time to do all the necessary research. If you’re a beginner in the sphere of the stock market, you can find a lot of valuable information on the Internet and come to terms with the risk you’re willing to take.
9. Household Items
When it comes to household items, you should invest in the best quality, because such things are long-lasting. If you have to pay for repairing and replacing appliances all the time, it ends up costing you much more than buying quality items in the first place. Make sure to read reviews and compare different products before purchasing.
10. Be someone else’s bank
You can get some money on the side by giving loans to private individuals or entities 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 you make an investment, consult with a professional.
Collecting stuff 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 item used to be lucrative in the past, it 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 this field. Even if you don’t end up buying anything, at least you’ve learned something interesting!