2 Ways To Increase Your Net Worth in 2022

In this episode of the Stuff About Money podcast, Erik Garcia, CFP® and Xavier Angel, CFP®, ChFC, CLTC, discuss 2 ways to increase your net worth in 2022. Your net worth is an important measure of how you are doing financially over time. They break down the different asset and liability types that are important for you to track. School is in session.

Episode Highlights:

  • Xavier explains what net worth is and why it matters. (4:44)
  • Erik defines an asset as something that has monetary value. (6:17)
  • Erik explains the concept of illiquid assets. (7:03)
  • Xavier mentions that the liquid assets will be those that we can access within 24 to 48 hours. (8:15)
  • Erik mentions that if we tracked the value of the real estate on a continuous basis, it would most likely be as volatile as the stock market. (10:33)
  • Erik mentions that while calculating his net worth, he doesn’t include the value of his cars because he knows they depreciate. (14:19)
  • Erik believes that even if all of your net worth is invested in your illiquid business, you are still at risk if you need money for an emergency. (15:56)
  • Erik explains that there is only one way to expand assets, and that is to save or invest more money. (16:57)
  • Erik shares that we can also increase our net worth by reducing our liability, what we owe, or our debt. (19:06)
  • Xavier and Erik discuss where we should begin to reduce debt in 2022. (21:53)
  • Erik discusses his thoughts on student loan debt. (27:02)
  • Xavier asks Erik if there is a strategy for how much we need, what we should save, and what we should have in our savings account. (30:28)

Key Quotes:

  • “The liquid assets are going to be those assets that I have access to within, you know, 24 to 48 hours, if I need money, cash right now I have access to it. The illiquid assets are going to be the assets that I don’t have, they’re not readily available for me to get access to.” – Xavier Angel, CFP®
  • “There’s really only one way to increase those assets, it’s to save more money or invest more money, the way to do that is to spend less.” – Erik Garcia, CFP®
  • “Building your net worth is not it’s not a one-time event. This is something that you’re going to do over your lifetime.” – Erik Garcia, CFP®

Resources Mentioned:

About Erik Garcia

Hi there, I'm Erik. How you manage your money and other resources impacts practically every aspect of your life. I help individuals and families invest plan for a more secure and predictable financial future. Thanks for taking time on my site!

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