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What are 3 to 5 factors that significantly impact one’s net worth?


I’ll skip the obvious ones, like how much money you make, and get into the fine print. One way to boost your net worth is to remember that money now is worth more than money later as a result of the compounding effect of investment and saving returns. Similarly, the less you borrow, the longer you can live debt free or else the quicker you can repay debt you’ve already got, the better off your bottom line will be.
Another factor that greatly affects your net worth is the extent to which you can get help with your saving and investment from your boss or from Uncle Sam or his kin at the state level. The balance on a retirement plan builds up a lot faster when you’re able to defer taxes on contributions, income and gains, especially with matching employer contributions. Tax-favored programs should also be considered for education saving.
One way to increase net worth is to reduce spending, of course. A fairly painless way to do it is to cut out something small that you buy frequently. If you go out to the local tavern with coworkers on Friday afternoons, for instance, order one beer fewer and you could save several hundred dollars a year. If you could stand going without an elaborate, baroque cup of coffee two or three times a week, your net worth could increase by even more than that. More money and less caffeine could give you two ways to sleep easier at night.
-Conrad de Aenlle