Increasing your net worth - the basics
What is net worth? Basically it is the value of a person (or company), and can be figured out by subtracting liabilities from assets. If you sold all your assets and repaid all your liabilities your net worth would be the amount you had left over.
As an example, suppose you have $100 in cash, you own a TV which you could sell for $80 and you owe your friend $30. If you sold the TV and repaid your friend you'd end up with $150 in cash. This is your net worth.
So how do you increase your net worth? You have to make sure the total value of the cash you have and the assets you own increases more or decreases less than the cost of your liabilities.
How can you do this? There are two ways. You can increase the amount of money you earn, or decrease the amount of money you spend (or both, of course).
To increase the amount of money you earn, you could work longer hours, change jobs or ask for a raise, take on a second job, get a better rate of interest on your savings, etc.
To decrease the amount of money you spend, you could buy cheaper alternatives or do without certain things, decrease the rate of interest you are paying on debts, etc.
For many people their assets and liabilities are in balance, as they spend all the money they earn. Their net worth isn't changing at all. For others, they are spending more than they earn, so their net worth is decreasing (and probably negative).
Some people, however, have an increasing net worth. They will find over time that they become richer and richer. By working hard and setting myself a suitable budget I have managed to put myself in this category. You can too, you just need to make sure you spend less than you earn. It may take a bit of work and discipline, but the end result is that you'll build up a pile of money that is yours to do with as you please.