My Answer and 3 Proven Ways to Grow Your Net Worth
In the past week, I’ve had several meetings with clients, and one question has come up repeatedly:
“Should I focus on paying down my home as quickly as possible?”
My answer is almost always no, though I offer a cautious “it depends” in certain cases.
More often than not, I encourage my clients to invest their money instead.
Many of my clients don’t have a financial advisor and feel uncertain about where to start when it comes to investing.
If you’ve ever felt the same way, this post is for you.
Please note: I am not a financial advisor (anymore), and this is not formal financial advice. Instead, it’s a guide based on strategies I have personally used—ones that have worked for my family and that I believe may work for you if you’re willing to commit time, effort, and capital.
I hope this offers a helpful starting point for your own investment journey.
3 Proven Ways to Grow Your Net Worth
Whether you’re paying down your mortgage or considering it, there are ways to build wealth beyond simply focusing on becoming debt-free.
In my experience, true financial freedom comes when your passive income exceeds your monthly expenses—when your investments generate enough income to cover your lifestyle costs.
Here are the top three strategies I’ve used to grow my net worth:
1. Invest Monthly in the SPX (S&P 500) through Vanguard
One of the simplest yet most powerful wealth-building habits I’ve developed is investing in the S&P 500 index (SPX) every month.
This index includes 500 of the largest companies in the U.S. and has historically delivered steady long-term returns. I use Vanguard because they offer low-cost index funds, making it easy for anyone to start. You don’t need to be a stock-picking expert—just consistently invest in the S&P 500 each month, and let time and compounding do the work.
The key is consistency—invest every month, regardless of market fluctuations.
Here is how to get started:
- Call Vanguard: 1 (877) 662-7447
- Start Online: Vanguard Investor
2. Invest in Dividend Aristocrats for Passive Income
While the S&P 500 helps grow your net worth over time, dividend aristocrats provide a reliable source of passive income.
These are companies that have consistently increased their dividends for at least 25 years. They pay you to hold their stock and are financially stable, long-term investments.
You can research dividend aristocrats through this list: Dividend Aristocrats List
I also use the website Simply Safe Dividends to research and select the best / most undervalued dividend aristocrats that I can buy right now.
Simply Safe Dividends is a great tool for identifying companies with strong dividend histories and financial stability. Dividend aristocrats provide steady cash flow while growing your wealth, making them an ideal strategy for building passive income.
Additional Resources To Review & Research Dividend Aristocrats:
3. Invest in Real Estate (or REITs if You’re Just Starting)
Real estate has been another cornerstone of my wealth-building journey. While buying physical property requires significant upfront capital, time, effort, and knowledge (what to buy, where to buy, etc.), there’s another way to invest in real estate even if you don’t have $100,000 or more to start with—Real Estate Investment Trusts (REITs).
REITs allow individuals to earn dividends from real estate investments without buying or managing properties. By law, they are required to pay out 90% of their taxable income as dividends, making them excellent sources of passive income.
REITs focus on different property types, from commercial to residential and retail spaces, providing diversified exposure to real estate without the hassle of property management.
A Closer Look at REITs
For those interested in REITs, here are some that I’ve personally held for up to 20 years:
- FRT (Federal Realty Investment Trust): ~6.4% annualized return.
- ESS (Essex Property Trust): ~7.8% annualized return.
- NNN (National Retail Properties): ~6.2% annualized return.
- O (Realty Income): ~8.7% annualized return.
- BIP (Brookfield Infrastructure Partners): Based on recent data, Brookfield Infrastructure has shown annual returns of around 7-9%, driven by a strong focus on essential infrastructure assets such as utilities and transportation.
These returns illustrate the power of consistent investment in real estate, even without the capital to buy physical property outright. I encourage you to consider REITs as part of a diversified investment strategy.
Best REITs To Buy in 2024:
Final Thoughts
Growing your net worth and achieving financial freedom is a marathon, not a sprint. Whether you’re thinking about paying off your home or considering alternative investment strategies, these three approaches can help put you on the path to passive income and long-term success. The goal isn’t just to pay down debt but to make your money work for you by investing wisely.
Take small steps, stay consistent, and let time and compounding be your greatest allies.
Disclaimer: This is not financial advice. This post is written solely with the intention of answering one simple question clients often ask:
“If I don’t pay down my home, what else can I do with the money?”
The ideas here are just what I’ve done for my own family.
Treat this as a starting point for your own investment journey. If you make bank in 20 years, buy me a beer. If you manage to $%^& this up and lose all your money—well, look in the mirror.
What’s Your Strategy?
I’d love to hear from you! What strategies have you used to grow your net worth? Share your experiences and any other ideas that could help others reading this post. Let’s work together and learn from each other on the path to financial freedom!
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