This is a guest post from a friend of mine, Ashley over at Money Talks. She thought she had a terrible year financially but her investments saved her!
Every month I fill out a spreadsheet I have where I track our financial picture. I track our debt and savings balances and every once in a while I throw in our retirement account balances and our overall net worth.
Well I was in for a surprise this year when I figured out our net worth and compared it to last year’s.
How I Increased My Net Worth By 93% In One Year
Our net worth went up 93%! That’s insane! After the year we had I didn’t think we did well at all.
Here are the details…
- We paid off $8,839.81 in debt.
- Our savings decreased $3,863.46
- Retirement accounts went up $16,520.68
- Home equity increased $125,000
The vast majority of the increase in Net worth was due to things we had no control over, mainly the Real Estate market. We gained about $125,000 in equity due to nothing more than the market going up. The only control over we had over that was in 2010 we bought a rental house for super cheap. This allowed us to double dip when the market finally came back.
Even though we had a tough year we still got richer. That’s the beauty of buying assets that will appreciate over time. They are working to make you richer even when you aren’t. As far as things we could control we didn’t do well at all. I don’t know what our income was off the top of my head but we only used about $5,000 of it to better our lives. That’s nothing. That’s a single digit percentage. If we were only relying on ourselves we wouldn’t have done very well at all this year. But we weren’t relying on just ourselves. We had assets out there working for us as well, and as it turns out they did much better than I realized.
The moral of the story is to use the good years to buy assets. Buy things that will increase in value. Then when the bad years hit your financial situation won’t be destroyed.
If you need to change your behaviors and thoughts about money you can check out my free e-course.
photo credit: 401k 2013