The Secret to Increasing Your Net Worth by $1M in 3-5 Years
Part One:
What problems are Americans facing in achieving retirement?
There are difficulties Americans face when it comes to retirement. The good news is it isn’t too late to start heading in the right direction. One problem is we don't think about building net worth early enough or even at all. Many high-income earners are so focused on their career they simply forget about building wealth for their retirement. We’re extremely concentrated on our first stream of income, which isn’t necessarily a bad thing because in order to get maximum results, you want to be highly focused. But, it’s also important we are thinking about the future.
A second issue is many of us trust our 401k will be enough because that is what we grow up hearing when it comes to setting up for retirement. We work 20 to 40 years or until our 401k has built us a nest egg and hope it will be enough to last.
Also, I’m sure you have heard the saying, “keeping up with the Joneses.” What I mean by this is we are spending more money than we actually have. The neighbors get a nice car so we want a nice car, upgrades to the house, go on expensive vacations, all things that give us instant gratification.
There is nothing wrong with wanting these things, but these are major expenses. Making a few small changes to your habits even when it comes to little things like eating out less or finding a good place to INVEST your money can really help when building wealth. Waiting for that delayed gratification.
What exactly is net worth & why is it important?
Net worth is what you own free and clear (your assets) minus your liabilities (what you owe). We want to be prepared for our future, including future expenses. It is important we are always thinking ahead so we can take control of our retirement. Being aware of these things can protect you from an out of hand situation where you are stuck working well through retirement. We want to strive to become habitable.
The median household net worth for head of household:
· 35-44 years old is $59,800
· 45-54 years old is $124,200
· 55-64 age range is $187,300 [1]
The total debt burden for Americans over the age of 70 has increased 543% from 1999 - 2019, to $1.1 trillion, according to data from the Federal Reserve Bank of New York. [2]
So, as you can see it is important to get way ahead of this if you want to retire comfortably or early. Know the difference between good debt vs bad debt or when you can leverage your debt, etc. There are plenty of tips on “saving money” and I'll go more into this next week.
Look out for part 2 of “The Secret to Increasing Your Net Worth by $1M in 3-5 Years,” where we will uncover what the wealthy are doing to BUILD their net worth.
If you want to learn more about building wealth, I invite you to download my free eBook, “The Busy Professionals Guide to Creating a Diversified Wealth Plan & Why the Ultra Wealthy Expand Their Portfolio with this One Investment.’
[1]https://smartasset.com/retirement/average-retirement-savings-are-you-normal