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How to raise your net worth

Often when asked, it’ll take me a few seconds of thinking to remember my shoe size, my dress size, or my home phone number. Never my net worth; that’s always top of mind. Is that backwards? Considering my priorities and measure of personal success, I really don’t think it is. Don’t get me wrong, I certainly don’t want to give off the impression that a person’s net worth is the be all and end all of how they should be valued and treated as human beings, but I do think it’s a significant qualifying factor to a person’s success in business. There are a thousand business people and entrepreneurs who can talk a good game, but at the end of the day, the numbers don’t lie.

Your net worth is basically how much money you’d be left with if you subtracted all your debts from all your assets. I put a substantial amount of thought and energy into increasing my own personal net worth, and the habits I’ve developed have proven to be beneficial, not only from a personal standpoint, but also for my business and for my family. The simplest ways to increase your net worth are to purchase assets and to pay off debts.

Purchase Assets

One of the first lessons I learned, however, was that not every asset purchase you make will actually help you build your net worth. For example, a new car, unless it’s a collector’s item or vintage automobile, will depreciate faster than almost any other asset you could purchase. Forty thousand dollars spent this year could be worth $10,000 less next year. Any assets you purchase need to at the very least remain stable or ideally increase in value over time. I prefer to increase my net worth by way of real-estate, artwork and silver bars (a bit of a gamble, but I’ve found still more stable than gold). Others may choose to purchase rare coins, and my mother is partial to handmade Persian rugs. All these things will help in building your net worth.

Pay Off Debts

Another way to build your net worth is to pay off your debts—even if you have to start off with the small ones. Pay off your car loans, your student loans and your credit cards. If you have to prioritize, start with the high-interest debt first, or any other debt where the interest is not tax deductible.

Invest

It may also be worth it to use debt to build your net worth. This is especially the case when it comes to investing in real estate, where the debt you incur with a mortgage is being used to purchase an asset that will appreciate in value. This is always a risk of course, since there’s no way to know for sure whether an asset will actually appreciate, but there are lower risks involved if you focus on assets that have a habit of increasing in value.

As a business person, your net worth is an important figure to consider in your financial goals. Decide what your net worth goal is, and then do whatever needs to be done to get there. Work hard, make the sacrifices and ultimately, you’ll reap the rewards!

5 things I learned about investing — at the mall

by Candi Munroe

I love to shop. Since I have started investing for myself I have noticed something else: I observe things. They may seem like simple things, but they are really indicators of something much bigger. This is what I see at the mall — you can test them out for yourself.

1. Supply and demand

This is the most basic economic principle. A product that is in great supply or has too much supply is cheap. A product that is rare or in short supply is expensive. The most drastic example of this is Apple. Think about Apple stores with the long line-ups of people eagerly awaiting the latest Apple iPad or iPhone. Meanwhile, Wall Street boasts of the great margins Apple is getting. Their stock has also experienced an explosion in price. From its 2008 price of $90 to today’s price of around $550 (which is already down 20% off the high), the stock has impressed.

2. Fads vs. Classics

The mall always has the latest fashions deemed ‘in’ this year. This is not unlike Wall Street. Yes, analysts study the numbers, but then they make estimates on what they think will sell this year and make recommendations accordingly. These companies and their stocks are hot and everyone wants to own them. A more classical girl, I like buying good quality products and wearing them year-to-year. I would never buy a fad and expect to wear it into retirement.

3. Are there job openings?

When the economy is better more people have jobs. When the economy is depressed, people lose their jobs. I recently vacationed at a hotel where I had vacationed the year before. This year it was much harder to be served. I waited in line more often and the staff were agitated and overworked. This tells me that the staff has been reduced to save money in a bad economy. So when you are at the mall, look around. Are the stores well staffed? When you eat out, are there plenty of waitresses and waiters? If so, this is a sign that the economy may be on the way up.

4. Are the stores well run?

Are they concerned about their brand and reputation? This is more about individual companies. Which companies take care of their employees? Starbucks give their U.S. employees health care and opportunities to invest in the company’s stock. The employees I encounter there are happy and engage the customers. Good hiring? Good management? Solid policies? Probably a bit of each.

5. Are people buying at or near full retail prices?

Observe the shoppers in the stores. Do they have lots of bags? Are the bags large? (Discount the effect if the discounts are high.) Many people out shopping puts money back into the pockets of businesses and is a good sign that better days are ahead.

Do not let these simple observations pass you by in the shopping haze. Keep in mind that these general indicators tell us how people feel about their job security and how much optimism they have about the year ahead. They can also help guide you to products and ideas that are good targets to research and invest in yourself. And this is fun! After all, ladies, aren’t we all about multitasking?