$1 Million is Not That Much

NEW YORK (MainStreet) — If your financial goals include the elusive quest to feel wealthy, a recent report says $1 million won't cut it anymore. Feeling wealthy is subjective, of course, but most people define it as the ability to live without financial constraints. And that's a luxury with an ever-increasing price tag. According to UBS Investor Watch, the threshold to feel wealthy has risen to $5 million of investable assets.

But don't let that number discourage you. Regardless of your current financial situation, there are five main steps you can take to increase your net worth.

First, it helps to set a specific goal. Money is just math, after all, and if you know how much you want to accumulate you can work backwards to figure out a plan to achieve your goal. The richest people in the world have a tendency to set seemingly unrealistic goals and then achieve them. Don't sell yourself short.

Clipping coupons is nice, but in order to increase your net worth you really need to increase your income. If you're overdue for a raise, sharpen your negotiation skills and set up a meeting with your boss. If that doesn't work, it may be time to look for a new job. You might even consider starting your own business or supplementing your income with outside work or consulting.

Once you've got a goal and an upward trajectory for your income, it's important to save consistently. No one ever got rich from spending freely. For the truly wealthy, that part comes later, after they've reached financial independence. Why struggle to lease a Lexus on your way to the top when you can buy a Bentley once you get there?