Net worth grows from three places: income minus spending, debt paydown, and investment returns. Here's which lever matters most at each stage.
Net worth changes by: (income − spending) + investment returns − debt interest. That's it. Every strategy for growing net worth affects one or more of these variables.
When your net worth is low, investment returns don't move the needle much — 7% on $10,000 is only $700. What matters most is the gap between income and spending. A person earning $60,000 and saving $15,000/year will build net worth faster than someone earning $100,000 and saving $5,000/year.
As you accumulate assets and debts, the interplay matters. High-interest debt (credit cards, private student loans) should almost always be paid before investing beyond a 401k match, because the guaranteed "return" of paying off 22% debt exceeds expected market returns. Lower-rate debt (federal student loans, mortgage) may make sense to carry while investing.
At $500,000 in investments, 7% annual returns = $35,000/year in growth. At $1,000,000, it's $70,000/year. At this stage, your portfolio is working harder than most people's salaries. The transition from "savings rate drives growth" to "compounding drives growth" is a genuine inflection point.
Calculate your starting point, then revisit quarterly.