Wealth-building is a process that generally takes time. Although the idea of becoming an overnight millionaire is appealing for many, the only real way to get rich overnight is via speculation, an inheritance or a lottery win.
Ironically, the best way to build wealth “fast” is to chart out a prudent path toward long-term gains. The quicker you can save and invest, the faster your money will compound, which is the true magic behind building wealth. Here are 10 ways you can grow your net worth as rapidly as possible without taking on undue risk.
I invested in sales training when I was 23. That made my income-producing ability skyrocket. Investing in yourself is the best investment you can make.
1. Find a job in the right vehicle: The rich are able to get in with the right company where there is opportunity for growth. My VP of sales Jarrod Glandt started working for me over seven years ago for $2,500 a month. He wasn't making anything but he was in the right vehicle. He grew his skill set and was able to multiply his monthly income many times over because he knew I was looking to expand.
Too many people just look for a job. You need a job, but you need the right vehicle. All companies live from this thing called revenue. Get commissions rather than just a salary and you will finally be in control of how much you earn.
2. Get great at what you do: Commit to being great, not just average. Any industry can be a painful profession for average and bottom performers, but massively rewarding for those that are great. Those that live, breathe, and eat their profession, those that are obsessed, become great.
I have never met a great who wasn't all in and completely consumed by their trade. Have you? The fact is, if you aren't great, you are average. The rich get great.
3. Get multiple, connected income streams flowing: You won't get rich without multiple flows of income. That starts with the income you currently have. Increase that income and start adding multiple flows.
You want what are called symbiotic flows. Do not just add disconnected flows. Instead, find other ways you can add income to the job you already have. My video guy does advertising for me — and after proving himself, he started making advertisements for those connected to me. He didn't start a doughnut shop.
Too many people go from one flow to a second flow, resulting in two flows that do nothing. Your flows should always be connected.
4. Hit $100K, then invest the rest: First, try to save $100,000. Why? You need to prove to yourself that you can go out and get money. If you have only $10,000 saved, your only priority should be increasing your income so that you can save more.
Saving $100,000 shows that you have an ability to make money and then to keep it. Most people can't do either of those things.
5. Buy a Rental Property
One of the key ways to build wealth fast — and over the long term — is to earn passive income. And one of the best ways to generate passive income is to own one (or several) rental properties. With a well-managed rental property, you’ll receive a steady stream of income every month, with little additional effort required on your part.
While you’ll have to find tenants to move in and will have to deal with occasional maintenance issues, your income will essentially be on auto pilot. Unlike your mortgage payment, your rents will continue to rise over time, meaning your tenants will be paying some or all of your mortgage while you watch your properties appreciate in value.
Run Side Hustles
Even if you have a job, you don’t have to only rely on your paycheck. You can run a successful side hustle to increase your income. You can turn your talent or hobby into monetary value during your free time.
There are many lucrative side hustles you can run online as long as you have internet access. These include:
- Working as a virtual assistant
- Freelance writing and editing
- Copywriting
- Online tutor, coach, consultant
- Web design, app development, coding, etc.
- Part-time professor at a local college
- Part-time gym instructor
- Freelance bookkeeping, tax preparation, tutoring
- Becoming a shopper
- Part-time driver for a ride-sharing or delivery service
6. Create a budget
Creating a budget and sticking to it is crucial if you want to know how to build wealth from nothing.
Using that regular income source we just spoke of, now you need to create a budget to take control of how you are spending your money, usually set on a monthly basis.
A budget is a financial plan for a defined period that contains estimated income and expenditures for that period.
Every household and/or individual needs to create at least a monthly budget to identify your expected income and estimated expenditure. Living without a proper budget is like sailing without a compass, and you can guarantee that you’ll get lost in the seas of financial missteps.
A popular budgeting technique is the 50:30:20 rule. In this technique, you can formulate a budget where 50% of income goes to essential expenses (rent, mortgage, food, healthcare), 30% to non-essentials like shopping, vacation, entertainment, and 20% to savings and investments.
Why is budgeting important?
One main reason is that by understanding how you spend your money, it’s easier to identify the things that can be cut: the lower your expenses, the more you can add to your savings and investments.
By identifying and cutting unnecessary and avoidable costs, you can build wealth faster. It’s that simple.
7. Build an emergency fund
Now that you have learned how to save a significant part of your income, the next course of action to build wealth from nothing is to create an emergency fund.
An emergency fund is like self-funded insurance. It’s money you set aside for unexpected expenses like car repairs and unforeseen circumstances like job loss or pandemic-induced lockdowns.
When unexpected expenses and unforeseen circumstances arise, there are ways to make matters worse: incur debt and/or sell your investment(s).
You pay interest on debt, and when you sell your investment(s), you lose both the amount you sold and the interest from the market exposure it could have earned if you didn’t sell.
Therefore, to avoid those two scenarios, we recommend you learn how to start an emergency fund right away. An emergency fund should hold between three to six months of your monthly expenses. Also, ensure those funds are in a savings account where you can easily access them when the need arises.
Like insurance, an emergency fund won’t make you wealthy, but it will prevent you from selling your investments or incurring debt during emergencies.
Live Within Your Means
You’ll never generate any wealth at all if you spend more than you earn. To set yourself up for a lifetime of prosperity, it’s important to create a strict budget and stick to it. Make sure that in addition to all of your unavoidable expenses, you’ve got a significant line item for saving and investments. Every month that you can come in under budget, you’re adding to your pool of lifetime wealth.
Don’t Be Too Conservative
Although being too speculative is a sure-fire way to risk all the savings you’ve worked for, being too conservative can be equally damaging in terms of limiting your wealth. Taking some risks in your financial life — from investing a bit more aggressively to starting your own business — is a necessary component if you want to generate outsized levels of wealth.
If you put all of your money into Treasury bills, for example, you’ll actually generate a negative real return after taking taxes and inflation into account. Owning some stocks, real estate, your own business or even some cryptocurrency are ways to gain exposure to higher potential returns on your investments. Just understand that while speculation has a role in generating wealth, it also brings additional risk to the table.
Building wealth is not a rocket science process. With dedication and discipline, you can grow your wealth fast. Before starting on this journey, it’s important to equip yourself with financial education. That alone should catapult you through the other steps seamlessly and eventually build wealth.
Many people overlook retirement accounts when it comes to building wealth. You’ll not only save for retirement but also grow your wealth over time.
