The Quickest Way To Significantly Increase Your Net Worth

Your net worth equals what you own minus what you
owe It is commonly referred to as the difference between
your total assets and your total liabilities
Here’s a simple illustration:
Home Value = $350,000   Mortgage balance = $150,000
Investments =  100,000   Credit cards =              20,000
Auto =                45,000    Auto loans =
               30,000
Savings =           15,000    Bank
loan =                   4,000
You Own =     $510,000    You
Owe =               $204,000

Therefore, your net worth would be $306,000
There are two ways to increase your net worth You can own more
things or you can reduce your debt obligation This article will
focus on reducing your debt first because it is the
fastest way to generate more money and, then, buy (own) more
things
In our example, you have $204,000 of debt If you’re like most
people, you pay less attention to the mortgage and car loan
balances because you consider them to be rather normal
(necessary) to your way of life
The credit card companies are probably charging somewhere
between 12 to 18 percent (forget those slick, short-lived
introductory teasers) and the bank loan is probably around 6
percent
Now, before we go further let me ask you a question Which is
faster? Create $204,000 (in other words, own more) or reduce
$204,000 of debt? In both instances, the result is the
same because your net worth will have increased by the same
amount
To create $204,000 in 15 years, you would have to invest
$6,95669 each year for 15 years and receive a guaranteed 8
percent rate of return Where can you find a guaranteed
rate of return this high in today’s marketplace? No where!
To reduce $204,000 of debt in 135 years, it takes only
$100 extra each month Now, let’s make sure you understand what
I just said
To increase your net worth by $204,000 you must invest almost
$7,000 each year for 15 years You hope and pray you’ll receive
no less than 8 percent average every year
Or you can come up with only $100 each month to reduce 100%
of your debt (to include your mortgage) in only 135 years —
guaranteed! Hard to believe isn’t it?
Go ahead and check it out yourself First, use a compound
interest table to compute the investment requirement Then,
print out and complete this debt reduction chart You’ll need an Adobe
Reader, which is probably already installed on your computer
Otherwise, go to adobecom for a free download version
In every instance, it is faster and more reliable to eliminate
your liabilities than to increase your assets Why? Because the
interest you pay on your debt is excessively higher than
the guaranteed interest you can earn
By following the debt chart and adding an additional $100 each
month to the minimum payment requirement, you can dramatically
compound the effect of your payments and expedite the
complete elimination of all your debt
It’s a lot easier to come up with $100 extra each month than it
is to find $6,95669 each and every year for the next 15 years

Tags | balance, balances, cards, credit, guaranteed, investments, loan, marketplace, mortgage, obligation, result, teasers, total, worth