15 Ways to Grow and Protect Your Net Worth

When it comes to improving our quality of life, getting the most happiness out of every day,  and reaching our goals, it helps to have some type of plan in mind. Giving some thought to what you want, and how to get there, is generally more effective the operating randomly without a plan.

To me, when it comes to those aforementioned aspirations, my framework is to focus on relationships, health, and wealth. As I wrote in one of this blog’s foundational articles, the role of money in our lives is of course personal, but for me it does encompass those 3 aspects I just mentioned.  Relationships, health, and wealth can all influence one another.  To the extent that we are strong in one area, we can potentially help ourselves in the others – with the opposite holding true as well.

So clearly, while money isn’t the most important thing by a long shot, it’s realistic to say that it can help improve the quality of our lives. To that end, tying back to the opening paragraph, it behooves us to have a plan for how to manage our money and grow our net worth.

With that in mind, I’ve come up with these 15 ways to protect and grow net worth:

  1. Get a good formal education.  I’m starting with this one since there has been much chatter in the blogosphere in the last few years about the value of a college degree, and whether or not it’s really worth it. This topic was addressed here in a discussion on the choice between college or entrepreneurship. Well, I do think that where one goes to school and how much it costs can greatly impact the ultimate value proposition of a particular investment. However, that doesn’t change the reality that a college education is important and does matter. Plenty of data out there indicates that those who avoid higher education will face a lifetime of lower earnings. Again, just be extremely careful when making your decision on where to spend tuition dollars. Also remember, you can always be an entrepreneur and a college graduate!
  2. Embrace continual learning.  Keeping up on the education theme, it’s important to keep in mind that what we learn in our formal education gives us a good foundation and an essential piece of paper, but the learning doesn’t stop there. I think that the ability to continually grow through experience, along with the trait of intellectual curiosity, are important factors in determining personal and career advancement. We can always learn something new everyday, and add this experience to our toolbox.
  3. Focus on your career.  Your experience, and the value you can add to someone who will pay you for your services, is what will make you a big share of your money.  Unless you’ve inherited big money, where else – realistically – are you going to be able to generate the income for your food, shelter, transportation, etc? Basically, my idea is this, as I’ve expressed before: you have to make money before having anything to save.
  4. Generate multiple sources of income.  While your career will likely be your biggest source of income for a good part of your life, you don’t want to put all your eggs into one basket. Jobs can be lost, career tracks can be altered, and a whole host of so-called unexpected events can happen. For safety, it’s a good idea to work on alternate sources of income that can be done on the side. Plus, aside from safety, these efforts can provide additional income and maybe an opportunity to do something entirely different someday!
  5. Discern wants from needs. What do we need? I had put together a personal finance hierarchy of needs that I think provides a framework for thinking about certain priorities. Along those lines, it’s essential to be able to decide upon what we presently need, and what we simply want. For example, if given an option of a older, dated 3 bedroom house or a brand new, sparkling 4 bedroom McMansion, choosing the older home over the newer home is looking at needs vs wants. Nobody needs a brand new house.
  6. Maximize the income minus expense gap. Once we earn money, as noted above in #3 and #4 – and figure out needs vs. wants, as noted in #5 – we can work on saving. This is the bottom line, where income and expenses intersect to result in savings. It’s kind of like a company that reports profits –  income minus expenses equal how well they did. I mean, unless we focus on this gap and actually save, our net worth will have difficulty growing.
  7. Practice effective asset allocation.  Put your savings to work for you. If you have an immediate need for funds, you may want them in safer investments (like cash). If your investment timeline is longer, you may want to increase the percentage of funds in stocks. There are many approaches people take to asset allocation, and it’s vital to utilize one that matches your situation.
  8. Put money in your employer 401(k) plan.  The employer match is a great deal for employees. The rate of return that you can earn on such allocations can be significant. For example, if you drop in $3,000 – and your employer matches it dollar for dollar with another $3,000 – that’s pretty good!
  9. Manage Risks.  Not all risks are bad. It’s good to keep in mind that risk and potential reward often go hand in hand, which is factored into our decisions in #7 above. Additionally though, there are risks in which we need to protect the downside.  When it comes to assets, the the Buffet’s Rule #1 on losing money is one to keep in mind when it comes to making up losses. In a different context, avoid big losses, and get proper insurance for your home, health, and vehicle. Additionally, proper estate planning falls into this category as well.
  10. Eliminate Debt.  If you owe someone money, you’re essentially a servant to them. If you needed to take out a mortgage loan to buy your home, then you’re effectively a servant to your lender. If you don’t pay your lender, you’ll be out of your home. That puts things in perspective, right? Plus, by paying high interest, you can really dig yourself in deep. Best to avoid debt if you can, and pay off what you do have as soon as possible
  11. Think long-term. While living in the moment is important and a source of joy, we also have to spend some time also thinking of the future too. Taking a long-term time horizon, and remembering that we ultimately need to retire, is fundamental to growing and protecting net worth.  Personally, I like to think that I’m working for the me of today, as well as the me of 35 years from now, who might not be able to work. That’s my biggest financial motivator right now – making sure I’m not old and broke. The opposite would be old and financially prosperous, which is preferred!
  12. Be relentless and persistent.  My own observations are that the times where I’ve truly wanted something badly enough, and really, really worked hard for it – are the times when I’ve achieved the most success.  I’ve observed this in others too, where some people who are determined and tenacious may achieve things that others who are seemingly brighter and more talented – yet less persistent – may not.  The more I’m around, the more it seems like once you pass that threshold of being “smart enough” to do something, the next real differentiator between success and lack of it is hard work.
  13. Be resilient.  For most people, life is not a straight, linear path to some type of nirvana. While we hope that the majority of days are spectacular, there will be a few speed bumps along the way. More than that, there might be times where truly “unexpected” setbacks occur. Job loss, health issues, divorce, accidents, and the like come to mind. It may not be easy, but try to be mentally tough and prepared, as the odds are that at least one of those less than exciting events will happen to most of us.
  14. Nourish positive relationships.  So, we’re back to what I said up front – how wealth is tied in some way to relationships and health. In terms of relationships, this can take on many forms. First of all, people that are married tend to have a higher net worth than those who are single, on average. At the same time, divorce can damage finances severely.  So, that’s one way relationships matter! However, this applies to many other relationships. If you get along with your boss, for example, you’ll be better off than if you were at odds. If you network well, you’ll learn more from others and might have more professional and business opportunities than if you were more isolated. To the extent that you enjoy people, are interested in others, and are able to get along with others effectively (and smartly), it seems like you’ll be in a better position to succeed.
  15. Stay healthy. Most importantly, of course, being healthy means that you can enjoy life and be there for family and friends. However, it also matters for your net worth. First of all, if you’re not healthy and incur significant medical bills, that be money out the door that you could have saved. Second, and actually this might be more important, if you’re not healthy, you’ll have trouble working. Which means, you’ll have trouble earning an income.  That’s yet another motivator to eat well, get plenty of exercise, and manage stress. Even sleep can impact wealth, so it’s important to get enough!

My Questions for You

What are your thoughts on this list? Are there any here you especially agree with?

Which of these approaches do you feel like you do best and worst?

Do you have any more suggestions on general tips to grow and protect net worth.


  1. says

    Impressive list Squirrelers! I think the one that made the most impact on me was the effect of compounding. I knew what CI was mathematically, but didn’t grasp its power financially.

    That realization had the most profound impact on me.

  2. says

    The Formal Education is a big one – and you alluded to it, but picking the right Major for the debt you take on. Don’t take out $200,000 in loans only to major in Underwater Basket Weaver.

    Also, when it comes to Multiple Streams of Income – those are great, but the worst time to try to develop those is right after you lose your day job. Unfortunately, they take time, so you’re best off working on those in the good times so you have a safety net for the bad.

    • Squirrelers says

      PKamp3 – agreed on picking the right major. I recall someone back in the day who described how her parents shelled out several hundred thousand dollars for her sister’s college education, only to have that sister totally lose interest in that field right after graduation. I suppose that impacted the parents more than the kid, but imagine if the kid herself did that? Ouch.

    • Squirrelers says

      Andy – great, glad you’re focused on these things. I totally agree that it’s an ongoing process. Life situations aren’t static, and we have to do our best in different circumstances, which requires focus. I’m giving it my best shot, as well as I can right now. I hope to keep on improving, as there’s plenty of room for that.

  3. says

    Wow, what a list. I feel like this should be an article in Macleans or something. Very insightful. I like how you included so many different aspects of a person’s life because in reality many things add up to a person’s net worth and life accomplishments. I would agree that continuous learning is important. It provides opportunities. I also agree with being resilient and nurturing relationships. These are huge when it comes to feeling important and making good decisions accordingly.

    • Squirrelers says

      Miss T – thank you! I appreciate your feedback. It seems like you see it as I do, that growing net worth is a multi-faceted endeavor that draws upon different behaviors and aspects of our lives.

  4. Squirrelers says

    dojo – thanks, glad you liked the article. Congrats on getting closer to getting debt free, and glad you’re confident. That’s got to be a good feeling!

  5. says

    Excellent list! Relationships include any children a person has as well. Raising them to get a good education, formally and informally, so they can have a successful life is very important to me. They say the love you are raised with can sustain you through life’s ups and downs very well.

    • Squirrelers says

      Maggie – wise comment, I like that one. There’s much to be said for how efforts to raise children can be instrinsically rewarding in a non-monetary way. That can help us in other ways.

    • Squirrelers says

      krantcents – that’s a good one, I like that. We call all learn from others who truly excel, no matter the arena actually.

  6. says

    Solid list Squirrelers! I believe in quality education and continual learning, and persistence. Health is also so important and something so many of us take for granted until it starts failing on us. -Sydney

    • Squirrelers says

      Thanks Sydney! I agree with your comments, and know what you mean that people take health for granted until they see signs of problems.

    • Squirrelers says

      Marie – I was wondering if anyone would say that. You know, persistence seems like it can overcome talent and other advantages in many cases. I’m a big believer in persistence.

    • Squirrelers says

      Corey – I think that a lot of people don’t view education as an investment that requires an assessment of ROI. I do think that some expenseive schools are probably more than worth it, but others are overpriced and give nothing more and sometimes less than what a student could get at a less expensive public school.

  7. says

    This is a phenomenal list and very closely aligns with my own values and rankings. I’m terrible with asset allocation though. I hate managing the money I do have. I tried farming that out once, but it ended badly. But, I guess it is good that I do most of the other things pretty well which should make up for not having that optimal portfolio mix.

    • Squirrelers says

      First Gen – thank you, glad you liked the list. As for asset allocation, I think it’s important and frankly, I need to do it more often. If you’re doing things on the other aspects of personal finance, you’re probably doing a great job.

  8. says

    I completely agree with the synergy between health, wealth and relationships. When these things are going well, they seem to contribute to each other. When one or more are going badly, they drag the others down.

  9. says

    Howdy Ray – Good post. Cultivating good relationships can’t be underestimated. I think a great network of relationships goes farther than almost anything else when it comes to cultivating success.

    Best, Sam

  10. says

    This is one of the best lists I’ve seen regarding personal finance in general. It touches on every aspect a person needs to succeed with money. I believe 4, 6, and 10 are my personal $$ favorites. One suggestion I have, is to keep a diligent eye on all types of fees when investing. It can save you thousands over a few decades.

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