Increase your net worth. 4 Strategies
Yesterday we told you about cash flow. This week, we wanted to drill down on the topic of Net Worth. This is the sum total of your assets and liabilities (basically what your OWN minus what you OWE). When you build on your net worth, you increase your financial security over the long haul. When setting your financial goal, ask yourself, where do you want to be in 5 years, 10 years, at age 65?? Time is an amazing thing to have on your side when building your net worth portfolio. If you don’t have time, you can also look at the following 4 strategies:
- Purchase on shorter amortization notes, 15 year instead of a 30 year. (yes this is opposite of what we said last week, remember, this is for people with less time to build. You can also start with a 30 year amortization and refinance into a 10 or 15 year as your financial picture allows.)
- Be willing & able to make improvements to your properties. Finding the hidden value or adding value to your “fixer uppers” increase property value, in turn total net worth.
- Invest in single family homes, these generally have higher appreciation rates than multifamily properties. (again, opposite of what we said last week, so know your goal. Do you want fast and large cash flow or a faster higher net worth)
- Accelerate your debt pay down – regardless if it’s a 15 or 30 year amortization.
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