By JLP | May 3, 2007
From CNN Money – 7 Net Worth Killers (links along with my lovely commentary):
Don’t take the “invest-it-and-forget-it” mentality too far. Also, don’t have too much of your money in low-yielding savings accounts.
The bigger the house, the more you’re going to spend in mortgage payments, upkeep, taxes, and everything else. So, although the equity in the home will help your net worth grow, the money spent keeping it up will take away from your net worth. With all the dumb mistakes my wife and I have made, we made awesome choice when we bought our house. We bought what we could afford but were able to find a house in a great neighborhood. Our house is now worth about 60% more than we paid for it nearly eight years ago.
No comment. This is a no-brainer.
Take advantage of all the tax-savings vehicles that are LEGALLY available to you. Again, this is a no-brainer.
A lot can be said for practicing self-discipline in your spending. A lot of times we want things only because they are new or popular, which means we’re going to pay more for them. I remember people paying $10,000 more than sticker price for the Mazda Miata when it first came out. Now look at how many of them you see out on the roads. If we can force ourselves to put off buying these things, the newness will wear off and the price will decrease and we can buy them for a lot less (or we will have moved on to something else).
Balancing your net worth with your cash flow.
Common sense here. If you have debt, you want it to be at the lowest interest rate possible. You also don’t want to carry credit card debt or consumer debt any longer than you have to.
This is all common sense stuff. You just have to do it.
Now watch – a blogger will turn this into a seven-day “series.”