How to increase your net wealth from savings

african-entrepreneur-investment-guide

 

Whether you are an employee or a business owner, assets are those economic sources that have the capacity to make a profit in the form of fixed assets (usually real estate) or current assets (assets or securities enrolled in the economic circuit of a business).

In order to increase the value of your net assets, you must know that this is due to the difference between personal assets and personal liabilities. A simple and clear definition is given by Robert Kiyosaki in the book “Rich dad, poor dad”: Active = Whatever brings you money in your pocket; Liabilities = Anything that gets you out of pocket.

In other words, the assets are: cash, savings accounts, deposit accounts, bonds, business, non-mortgaged real estate, valuables, intellectual property, etc., and liabilities are practically all debts, credits and other types of loans you have.

Net worth = Assets – Liabilities

How to increase your net assets month by month?

The most important thing is to set aside a monthly amount of money. For example, spend 15% of your total income on assets: in the savings account, in the investment account, deposits, etc. You will do a very good job if you switch assets, bonuses or small profits. This will increase your net worth faster. A good idea is to set your annual net wealth growth target and to track it monthly to evaluate the economies situation.

The next step is to increase the value of your passive income, that is, investments, because they represent a factor that contributes significantly to your personal net worth. Although there are several types of investments such as those in bank interest, the most profitable ones are those in stocks, bonds, currencies and other securities. The bank interest rates will not take you too far, as they are too small and include more and more tax obligations.

However, before you start investing, we recommend that you make sure you are prepared for this. The path to reaching the target is not an easy one and often involves efforts and headaches, but it is worth it. Because once you gain financial independence, you also get satisfaction in all other areas.

The earlier you start, the better your account results!

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