As the global market heads for choppy waters, investors, stockbrokers, and other financial professionals are concerned about how it will affect their respective businesses.
But a volatile market does not discriminate, and every individual should pay special attention to their net worth.
What is Net Worth?
Net worth is the monetary difference between assets (like investments and account balances) and liabilities (mortgages and debt).
Calculating net worth gives people an insight into how their debt can affect their future. This number also highlights areas that can be worked on to improve overall financial standing in the long term.
Here are some dos and don’ts that can help people manage their net worth in a volatile market.
Refinancing loans and credit card payments may seem dicey in times of market volatility. However, if leveraged correctly, it can help trim liabilities by clearing more of the principal amount with each payment.
Don’t ‘Panic Sell’ Investments
When markets become unstable, it’s important to avoid speculation. Investors must evaluate stocks and decide whether they’re worth holding or letting go.
It’s best to evaluate investments on three factors. When an investor is sure about the fundamentals of an investment, it makes sense to hold on. When they’re not sure about why they own stock, they should consult a financial planner. And if they’re unsure why they invested in a stock, it would be best to sell.
As Jason Kulpa, the founder and former CEO of UE.co, says, “It’s not the investment itself, but the security of the investor that determines success in the market.”
Do Avoid Personal Debt
Of course, a volatile market is not the best time to take on additional debt, even if it’s for a well-intentioned reason like starting a business.
When the market drops, financial experts also recommend never to borrow money to buy cars, electronics, or anything that goes down in value. And if possible, avoid increasing personal debt during market volatility.
Starting a business can wait until after the market has stabilized.
Don’t Spend Unnecessarily
Most people fail to abide by this rule simply because they’re unable to see how small, everyday expenses add up. It’s best to review spending habits in times of market volatility and trim unnecessary expenses.
This can involve getting rid of an extra car, cooking at home instead of eating out, and unsubscribing from a monthly magazine.
In times of market instability, one of the easiest ways to manage net worth is to want fewer things in life.
Apart from these tips, reviewing their desires and reducing them can help people grow their net worth because ultimately, the best way to build wealth is to actively abstain from spending it.
About Jason Kulpa
Jason Kulpa is a serial entrepreneur and the Founder and former CEO of UE.co, San Diego’s Fastest Growing Business multi-year award winner, and a Certified Great Place to Work multi-year winner. Mr. Kulpa is a San Diego’s two-time winner of the Most Admired CEO Award of the San Diego Business Journal and also a semi-finalist for the Ernst and Young Entrepreneur award.
1 Lincoln Street
Boston, MA 02111
News Source: StartupFortune.com
The post Jason Kulpa Comments on the Do’s and Don’ts of Managing Net Worth in a Volatile Market appeared first on Popdiaries.