How to Grow Your Net Worth Without Buying a Home

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by Advice Chaser
by Advice Chaser

Traditionally, middle-class people grow their net worth by buying a home. As they make mortgage payments and their house increases in value, they build equity. But that route isn’t open to everyone. Not everyone even qualifies for a mortgage. What if you change cities every year or two? What if you love your shared living situation? 

There are ways to grow your net worth that don’t involve owning your own patch of real estate. Think beyond homeownership and build wealth in other ways.

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Why Net Worth Can Grow Without a Home

Traditional wisdom says that real estate always increases in value. In reality, that doesn’t always hold true. While land usually increases in value, buildings depreciate every year. If you buy an older home, it will require expensive repairs to keep the value you invested in it.

Meanwhile, the market itself generally increases in value also. The S&P 500, a key economic indicator, increases by about 10% a year! Your house isn’t likely to gain in value anywhere near that quickly.

It takes money to make money, so regardless of how you try to grow your net worth, you need some cash on hand. While you need a large sum of money to use as a down payment on a home, you can generally start investing with much smaller amounts.

You can’t realize your gain from your home’s increase in value until you sell it. At that point, you may pay a significant amount between fixing it up to sell, paying the realtor’s commission, and your share of the closing costs. That’s why experts suggest not selling a house until you’ve owned it for at least five years. Other investments, however, can pay off much more quickly.

Paying Off Debt

Your net worth equals your assets (things you have, like your home and your savings) minus your liabilities (your debts). Increasing your net worth, then, can both come from increasing your savings and from paying off your debts. Both savings and debts will grow over time, so the sooner you start on either task, the better.

Your best tool to pay down debt is a workable budget. If your expenses regularly eat up your monthly income or even exceed it, you need to find ways to cut back. Increasing your income may also be an option. Keep track of your debt and celebrate your successes. It may not feel like it, but you just got that much richer.


Investments, large and small, can grow your net worth. If your money sits in a savings account all the time, you aren’t using all the opportunities you could be. And you have virtually endless options.

  • Certificates of deposit: You can buy CDs for six-month, one-year, two-year, or five-year intervals, with larger payoffs for longer periods. By putting a little money into these, you can grow your net worth faster than a savings account, with no risk.
  • Retirement account: If you have a 401(k) or other retirement account, you should contribute as much as possible. The money in the account is invested for you and will grow until your retirement.
  • Bonds: These pay an interest rate to you. On their maturity date, you will receive back the money you invested plus the interest.
  • Mutual funds and exchange-traded funds: These are fairly low-risk investments that track with the market. Investing in these can keep your portfolio diverse without direct effort on your part, because each fund is managed and balanced by professionals.
  • Stock trading: If you start investing in stocks, options, futures, and so on, you’ll need professional advice. It is possible to lose your entire investment if you don’t know what you’re doing.

Need Help Growing Your Net Worth?

Most people you know may have gained most of their wealth through homeownership. If that’s not for you, you need advice on the other paths available. With a quick phone call, we can connect you with a financial advisor who can help you find the right way to invest.

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