Increase Your Net Income

Have you ever wondered how much your coworker earns per hour? Is it more or less than you? It seems that everyone is hung up on wages these days, but this is absolutely not the most important measure when it comes to wealth.

Sure, someone might earn a lot of money, but what if they were terrible at managing it? They might consistently go out to expensive restaurants and luxurious vacations, which leaves their savings account with nothing in it! If you manage earn less than they do, but you manage your money well, then you’ll have a much more prosperous life in the future.

A Decent Measure of Wealth

If wages aren’t a good measure of wealth, then what is? In my opinion, your net worth is a much better measure of wealth since it doesn’t focus on how much money you earn per hour, but instead it shows you how much you are currently worth.

Net worth is a fairly simple calculation. To find your net worth, you just have to add up the value of all your assets (your house, cars, boats, furniture, retirement fund, savings accounts, checking account, etc.) and then subtract all of your current debts (your mortgage, car loan, credit card balance, student loans, etc.). The final number is your net worth.

For those that constantly spend what they have on vacations and depreciating assets, they might seem like they have all the nice stuff, but if you had the ability to see their net worth, it would most likely be a whopping zero bucks.

 

Related posts: 

Building your Reputation as a Freelancer

Finding Private Health Insurance When You’re Self-Employed

Work From Home Opportunities

Freelancing Options

Advantages of Becoming a Virtual Assistant

 

Building Onto the Measure

Once you know your net worth, there another measure that can show you how rapidly your net worth is increasing, and that of course has to do with your income. I like to call it your net income since it is simply the total of all of your incomes. For many, this is just one income – their full-time job. But, if you truly want to increase your net worth at a rapid rate, I would suggest that you earn multiple incomes.

Let’s say that you lost your job tomorrow. I know, it’s hard to imagine, but what if it actually happened and you didn’t have another source of income? Your net income would plateau at that point and then would start to inevitably come down since you had to pay your bills with the money in your savings or checking (or maybe from your retirement fund if you didn’t set up an emergency fund). This is a terrible situation, but it could have been avoiding if you developed multiple income streams.

How to Create More Streams of Income

You might immediately think that I’m talking about a second job, but I am absolutely not. I don’t want you to spend your days tossing pizza dough for $8 an hour. Instead, I’d like to see you develop an income that could grow over time, even if you decided to work less.

When you create your own business, this is entirely possible. All you need is a means of income (that you generate yourself) and a system that anyone can follow so they can do the work for you instead of you digging the trenches by yourself. A basic example of this is real estate. You might have to work your butt off to find the right properties to buy and then deal with the renters for a while, but once things are moving along, you could turn over your operations to a property management team.

They could take the responsibility off your hands, while you still earn a decent profit on the rental income. Duplicate this into more streams of income and you’ll never have to worry about losing your job and decreasing your net worth.

How are you trying to increase your net income?

Like this post? Want more great articles? Check out our newsletter to receive exclusive content sent only to the select few who subscribe. We will even start you off with the bonus 10-part eSeries Don't Envy the Successful Entrepreneur - Become One!"

Trackbacks

  1. […] S @ Grad Money Matters shares how to Increase Your Net Income […]

Speak Your Mind

*