For some people, growing your net worth by $5,000 per month might seem crazy. For others, it might seem normal. Growing your net worth by $5,000 per month means seeing your net worth rise by $60,000 per year. That sounds like a lot, but if you’re looking to retire and live comfortable in the future, you need to be pacing at this level.

It might seem daunting to grow your net worth by $5,000 per month if you’re focused on doing it through saving alone. You probably can’t – because there is a limit to how much you can save each month.

But if you focus on growing your net worth through a combination of saving, earning more, and leveraging passive income through investing, you can easily make and start exceeding $5,000 per month.

Make sure you check out our guide to Millennial Net Worth by Age if you want to see how you compare as well.

Let’s break it down.

Growing Your Net Worth By Saving

Most people start growing their net worth by saving, so let’s start here. This won’t get you very far in your long term goals, but everyone needs to save.

If you want to save $5,000 per month, think about what your income and expenses are and start saving the difference. Honestly, if you want to reach this $5,000 mark, you’ll likely need to be earning around $10,000 per month.

But there are ways to boost your savings without doing anything:

• Take advantage of your employer 401k matching contributions. This is free money that goes right into savings for you.
• Take advantage of an ESPP if you can buy shares of your company at a significant discount – this automatically boosts what you have saved.
• Take advantage of an HSA, especially if your employer offers you free money for doing things like getting a physical.
• Leverage cash back credit cards for purchases and get a rebate on everything you buy.
• Look at the other tactics I’ve used to save $500 per month without trying too hard.

No matter what your income level is, we all start by saving. The more you save, and the earlier you save, the more your net worth will grow over time.

Growing Your Net Worth By Earning More Money

To supplement your straight savings, you need to consider earning more money. Unlike simply saving (which has a finite limit), the amount of extra money you can earn is limitless.

Just think – if you could earn an extra $5,000 per month, you could simply save it and you’d be hitting your goals. But $5,000 extra per month is not easy. If you’re going to start a side hustle, or work a second job, it’s going to require time and effort. But it is possible!

In my early years, I was a huge fan of earning more money by buying stuff to resell on eBay. At my peak, I was both working full time 40-50 hours per week, and I was earning an extra $2,000 per month selling on eBay. I would go to garage sales and estate sales, then list them items during my off time. Same with packing and shipping.

There are lots of ways to earn extra money, but you do have to put some time and effort into it.

If you need some inspiration, check out this list of 50+ Ways To Get Started Earning A Side Income.

Building A Passive Income

The best way to grow your net worth by $5,000 per month is to develop passive income streams. We’ve talked about how to make $50,000 per year in passive income, and the rules are the same regardless of the amount.

The goal is that you take some of your extra money (either savings or extra income) and invest it in something that will earn you passive income. Then, your money that you invest grows for you! 

For example, you could invest in dividend paying stocks, or invest in real estate. We’re bullish on real estate and love the new products like RealtyMogul or Arrived that allow investors to take advantage of real estate investments for low minimums.

Growing Your Net Worth Through A Combination Of Tactics

For most of us, we’re going to grow out net worth through a combination of the above tactics, which makes hitting our goals easier.

Instead of needing to save $5,000 per month, what if you only needed to cut $1,000 from your budget? You could then focus on earning $3,000 extra and building your passive income to $1,000 extra per month.

Now, that starts to become much more achievable. Saving $1,000 in your budget is possible, and many bloggers have shown us how.

Earning an extra $3,000 is totally possible. Just last week my Uber driver was telling me how she made $3,000 per month driving – and she was a teacher for her day job. Everything she made driving was just extra income.

Then, it just comes down to generating $1,000 per month in passive income. That’s also very possible. You can take advantage of investments, real estate, savings, residual income, and more. If you have $300,000 in investable assets, earning a 4% return will realize you $1,000 per month.

Now, $300,000 may seem like a lot, but there are millennials that have already achieved this.

How To Track Your Net Worth

The most important thing to remember is that you don’t start growing your net worth by $5,000 per month overnight. You start by growing it by $1, then $10, then $100, and keep moving forward.

You save and invest each month. You pay down any debt you have. You are focused on earning more and growing your income streams.

Since it takes time, you have to track it. If you’re not already using a system to track your net worth, we recommend Empower. It’s a free online app that allows you to connect all your accounts and will track your income and expenses, and net worth for you.

Then, you can really start to know what you’re net worth is.

Do you track your net worth? What’s your favorite way to increase your net worth or do you like doing a combination of these strategies.