Growing your own net worth can seem daunting. Many people don’t know where to start, and 64% of Americans are not preparing for retirement.
Ultimately, building assets is the best way to start looking out for your future. What is an asset? An asset is anything you own that can be converted into money–preferably, lots of money.
No matter how big your paycheck is, you’re going to want to start investing in assets that will grow in worth.
So, where should you start? What are the best assets to build in the early stages of building your net worth? Read on to find out.
Start With Savings
Admittedly, the first step isn’t what most people consider exciting. Before you can start building assets, you need to make sure that you have a safety net of liquid cash.
That’s right, you need to create a savings account. Your savings account is meant to protect you from unexpected expenses, including medical bills, maintenance bills, and temporary unemployment. We recommend building a savings account that can cover six months of living expenses before investing in illiquid assets.
Create a Wealth Strategy
Even as you’re building up your savings account, you can start planning for your future. Now is the time to take a closer look at what your money is tied up in (ie rent or mortgage, bills, living expenses, and “fun” money). This will give you a sense of what money you have to start building assets.
Creating a wealth strategy will help you prepare for the growth and potential setbacks of building assets. Head to https://wealthability.com/wealth-strategy/ to find out more about creating a wealth strategy.
Now for the fun part! It’s time to start investing.
To make this more accessible to everyone, let’s assume that you only have $500 of liquid cash that you can currently invest. What are your options?
One of the best asset-building options is the stock market. You can buy ownership in a variety of companies in the hope that those companies will continue to prosper. Assuming they do, your shares will go up in worth and help you to generate a semi-passive income.
With real estate crowdfunding, you can now invest in real estate for as little as $500. This is a relatively new asset-building option, so make sure you understand the pros and cons before diving in.
Of course, there are other assets you can invest in, as well. Many people build their net worth by purchasing things like art and collectibles that are projected to increase in worth. However, you may want to hold off on these assets until you feel comfortable with how your other investments have grown.
Building Assets Will Set You Up For Success
Building assets won’t just grow your net worth in the present. It will also enable you to create a financially stable (and hopefully prosperous) future. Start building assets now and make the most of your paycheck.
Looking for more ways to protect your money? Take a look around for great savings tips and guides.