On last week’s edition, we had an activity on calculating our net worth. I hope you did that. It is imperative, that as an individual, you take control of your financial life.
Well, I calculated mine and I was able to reasonably ascertain my current financial situation, measure my distance to my financial goals at the end of this year and work towards meeting my goals.
Calculating your net worth will give either a negative or a postive net worth.
A negative net worth arises from higher liabilities than assets while the vice versa gives a positive net worth. However, if you have a negative net worth, strive to make a positive net worth. Likewise, if you have a positive net worth, strive to further increase it.
To increase your net worth,
- Increase your investment, savings and income sources;
- With cashflows coming in from these sources, pay off your debts; Also, try as much as possible not to take extra loans till you are done re-paying those you have now;
- Avoid or reduce maximally your rate of borrowing for personal needs;
- When you have a personal need, rather than borrowing, create an income source to meet that need;
- Finally, whatever you do, have it in mind to increase your assets and reduce your liabilities.
We believe in you!
To your financial independence and freedom
Originally posted on July 23rd 2018 on www.thefinancialliterate.wordpress.com (A previous version of The Financial Literate)