There are multiple experts available to teach you how to grow your net worth. They will tell you to begin planning for your retirement when you are young, take advantage of company 401K plans, invest in IRA’s, and eliminate your debt. All of these tips make sense and are helpful to increasing your net worth.
However I would like to tell you how to grow your net worth, when you are not young, when you don’t have a fancy job paying a high powered salary, and you can barely make ends meet. I suppose you want to know what makes me an expert on giving tips on growing net worth, and my sole reply is experience.
At age 18 I was homeless, living on a park bench in Florida with no job, no car, and no money in my pocket. Today, 30 years later I own four homes, have a masters degree, and enough money available to meet all of my needs. My parents told me when I was a child, that I had a remarkable ability to rub two quarters together, and come out with a dollar. They were right.
How did I move from the park bench to my current situation today? It was actually simple. I began with a principle that no matter how long I lived, I would never allow myself to get into that situation again. Never again would I be penniless or homeless. Never.
That mindset began my journey, and like all journeys, it begins with the sense that life doesn’t have to be that way. It begins with the belief that it can be different. You can achieve wealth, you can grow your net worth, you can develop financial security no matter where your current life course has taken you. Believing in yourself is the beginning, but it doesn’t stop there, you must have a plan.
I wasn’t sure what my plan at age 18 would be, and admittedly 18 is young and offers opportunities, but the techniques I applied to increase my net worth, can be applied at any age.
I needed an income. Lacking skills outside of a high school education, and living in Florida, I took a job working as a receptionist in a hotel in exchange for housing. That solved the housing problem, as not only did I get free housing, but it was actually on the beach, with an extraordinary view of the ocean. The job paid a small salary, the greatest benefit was the housing, as it literally took me off of the street.
I spent the additional time working in a restaurant that paid tips. I began saving these tips. I did it by buying a “junk” car. I decided to put money away in the bank. Before I paid a single bill I would pay me up front. If you want to grow your net worth, you must decide to pay you first. I know there are other bills that need to be paid, but if you prioritize you as the first priority, you will begin to find ways to pay the other bills.
I saved a couple thousand dollars in about a year this way, and decided I needed a better income then working as a waitress at a restaurant. Since I was low income, I applied for grants, scholarships, and work study programs and returned to college. I paid my own way. I avoided loans. I obtained housing through sharing it with others, and continued my employment putting money away by paying myself first. I continued with this method, avoiding borrowing money, all the way through graduate school. At the end of graduate school I had more then what I had started my education with financially, and I was able to generate a decent job in the social service sector. ( Not a high paying profession)
I wanted to purchase a home, and a down payment seemed out of reach so I decided to borrow the money from my credit union, and then assumed a loan from the seller. I bought the first home, with borrowed money, and rented it out. It generated a positive cash flow right from the start, and I continued to drive a piece of junk car, and continued to share housing with a roommate. It wasn’t until I was confident that I could afford another home, that I decided to take the plunge and borrow more money to buy a second home. This was possible because I got a roommate to help share expenses. I made sure that I continued to save money and pay me first, before any other bills were paid. I repeated the process two more times.
I made a decision to only borrow money for things that appreciated in value, and have stayed away from borrowing for things that are entertainment, or impulsive or depreciate in value.
I have always lived below my means and have never purchased a new car. It makes no sense to me to borrow money for a car that depreciates in value. I realize others may view a car purchase differently.
The great thing about having purchased real estate as a method of growing my net worth is that it has appreciated over time, and now supports me. I always save my change, and when I need to paint a home, or make an unexpected expense, I reach for my loose change. I take it to the bank, convert it into dollars and cents, and am usually able to fix the problem. I have been amazed at how much money I am able to save through saving my change in my piggy bank.
If you want to grow your net worth, you must start with an attitude that says you can do it, because you can. All wealth begins with the mindset that says you are able to achieve whatever you need to achieve in this life time. There is enough money in the world for all of us, even you.