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Ten Moves That Will Skyrocket Your Net Worth

Education and wealth

College degrees can add significant wealth. The more education you have, the more you’ll earn and the less likely you are to be unemployed. And if you can keep debt low while getting the degree (and there are reliable ways of doing this), then it’s almost guaranteed that getting a college degree is a good deal.

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Ten Moves That Will Skyrocket Your Net Worth

Ten Moves That Will Skyrocket Your Net Worth

http://www.budgetsaresexy.com/ten-moves-that-will-skyrocket-your-net-worth/

budgetsaresexy.com

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Key Ideas

Controlling expenses and wealth

Those who control their spending do much better. This doesn’t mean you have to save on EVERYTHING, just some things. Enjoy your life by spending on what you want here and there, just keep it in line so you have excess to save and invest. Even 10% will make you wealthy over time.

You’ve probably heard that time is your greatest investing asset. It’s true. The more investments earn and grow on their own, the greater they become.

Investment value is also greatly impacte...

You’ve probably heard that time is your greatest investing asset. It’s true. The more investments earn and grow on their own, the greater they become.

Investment value is also greatly impacted by the amount invested.

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SIMILAR ARTICLES & IDEAS:

Money rules to increase your net worth
  1. Don't spend all your income at once: the easiest way to grow your bank account is NOT to spend it all.
  2. Know how the Economy works.
  3. Avoid debt; personal debt destroys your net w...
It takes more time to make money than to spend it

You work thousands of hours to make a certain amount of money. And then, you can drop it all on a new car, luxury vacation, watch, or anything else that you desire.The easiest way to grow your bank account is NOT to spend it all. It’s solid advice. The ancient Stoics knew about this too. True freedom means you desire less.

Know How The Economy Works

Why do economies generally collapse? What’s debt? Who prints money? Why do they print money?You don’t have to be an economist. The point is that basic knowledge about how all this stuff works prevents panic. “Oh shit! The market is down! What now!!” Panicking will not help you.

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The 50-20-30 rule

It is a budget rule to help people reach their financial goals. It states that:

  • You should spend up to 50% of your after-tax income on needs and obligations that you must-have or must-...
Needs, wants and savings
  • Needs: these are those bills that you absolutely must pay and are the things necessary for survival (rent or mortgage payments, car payments, groceries, insurance, health care, minimum debt payment, and utilities).
  • Wants: these include all the things you spend money on that are not absolutely essential (dinner and movies out, vacations, electronic gadgets, etc.)
  • Savings: this includes adding money to an emergency fund in a bank savings account, making IRA contributions to a mutual fund account, and investing in the stock market.
Net Worth = Assets - Liabilities

Your net worth gives an overview of your financial situation at this point. It is the difference between what you own and what you owe.

Your net worth is positive if your assets exceed...

Calculating your assets and liabilities

Assets are anything of value that you own that can be converted into cash. Examples include:

  • Investments
  • Bank and brokerage accounts
  • Retirement funds
  • Real estate
  • Personal property: vehicles, jewellery and collectables.
  • Cash

Your liabilities represent your debts, such as loans, mortgages, credit card debt, medical bills and student loans.

Find your ideal

Determine your target net worth - where you want to be in the near-term and long-term future.

The following formula is helpful:

Target Net Worth=[Your Age−25]∗[1/5∗Gross Annual Income]

A 50-year-old with a gross annual income of $75,000 might aim for a net worth of $375,000 ([50 - 25 = 25] x [$75,000 ÷ 5 = $15,000])
Your net worth can be much more or much less than the amount indicated by the guideline.

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