Michael on June 25th, 2007
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Despite the thousands and thousands of books, articles, newsletters, blogs, billboards and advertisements, I have only discovered one true way to guarantee your net worth will increase. Now there are other ways that usually work and others that, via creative math and suspicious assumptions, are presented to always work. I’m not talking about those. I’m talking about a method so unsexy, so unpopular, so ignored that people have forgotten it’s the easiest one:

Spend less than you make.

When you spend less than you make, you will have extra cash. This extra cash, by definition, will be used to do one or both of the following, each of which increases your net worth:

  1. Increase your savings
  2. Decrease your debt

The Impact on Your Net Worth of Spending Less Than Your Income

Look at it this way, if you currently have a credit card balance you can’t pay off, it is only because, at one point, you spent more than you made. The only way to get out of debt is to do the opposite: spend less than you make and apply the extra money to paying off the debt. Painfully simple, yet completely guaranteed.

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