What are two ways to increase net worth?

• A. Increase assets, decrease liabilities, or do both.
• B. Increase expenses.
• C. Decrease income.
• D. Sell assets only.

Answer: (D)

Net worth is calculated as what you own (assets) minus what you owe (liabilities). To increase it, you can either add to your assets or reduce what you owe, and doing both helps more quickly.

Increasing assets means growing resources that have value—like saving more cash, investing, or buying assets that appreciate or generate income. Decreasing liabilities means paying down debt, especially high-interest loans, which lowers the amount you owe. Both moves raise net worth over time.

Options that involve spending more (increasing expenses) or earning less (decreasing income) don’t boost net worth; they tend to shrink what you have available to grow assets or pay down debt. Selling assets by itself doesn’t reliably raise net worth either, since converting an asset to cash without using that cash to reduce debt or invest for growth can leave net worth about the same or lower if the sale isn’t at a gain.