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You don’t have to earn over six-figures a year at your day job before you start learning how to build wealth.
Creating wealth isn’t easy but at the same time, it’s not mission impossible for most average Joes as long as you learn how to form healthy habits with your money and stick to a long-term savings and investing plan.
Yes, looking into some of the best passive income ideas will massively help too!
I am an example of a person who grew up in a low-income family and had no clue about personal finance or how building wealth works.
Just being able to pay the bills on time, including those minimum payments on the credit card bills, with no savings left was the best we could do.
But by the time I was in my early 20s, I educated myself on all the ways to acquire wealth when I realized my parents were always fighting about money at home.
One of my favorite ways to build wealth includes making extra money so I could increase my savings rate without significantly cutting back on my spending.
From knowing absolutely nothing about money to saving over 6 figures in my 20s and 7 figures in my 30s, I’m going to talk about everything you need to know about building wealth from nothing.
💡 QUICK WEALTH-BUILDING TIP: Did you know that you could build wealth quicker than the average person when you put in the effort to earn extra money on a hobby you enjoy? This is exactly what I did to speed up my net worth over the years.
I experimented with many different hobbies to earn extra money and my top recommendation today is to start a profitable blog from scratch with my easy step-by-step tutorial.
As a beginner, I honestly had no clue what blogging meant or how bloggers made money online, but I am SO glad that I stepped out of my comfort zone to start this blog because within 1 year of learning, I was making an EXTRA $5,000 per month on top of my 9-5 job. In less than 2 years, I hit my goal of earning $10,000+ per month with a very small blog like this one you’re reading here. You can follow my $10K blogging journey here where I started from $0!
Trust me, you DON’T need to be a tech wiz. You don’t need to be writing a blog post every day to earn money online with a blog. You also don’t need to be an expert at writing.
👉 Sign up for my FREE 7-day e-mail course here, and I’ll show you exactly how I make $10,000+ per month with this blog WITHOUT being a tech genius or expert. I literally started with NO experience and was very clueless. But doing this helped me earn extra money so I could increase my net worth at a faster pace – this could also help you hit your goal of saving your first $10,000 sooner!
Wealth building definition
What does “building wealth” mean?
Let’s start off with a simple wealth building definition.
“Creating wealth is a long-term journey of earning, saving, and investing money.”
Many people want to learn how to grow and accumulate wealth simply because they have the goal of achieving financial independence.
This may not be everyone’s goal because there are many who are passionate about growing wealth to become rich like a multi-millionaire or even billionaire.
But for the purposes of this post, we are going to assume that the purpose of growing wealth is so that you can live a very comfortable lifestyle without having to become extremely rich.
Now, let’s look at the best ways to build wealth so you can reduce financial stress and live the life you want.
Whether you’re in your 20s, 30s, or 40s, these wealth-building tips can help you develop a healthy relationship with your money.
1. Create a budget
Learning how to create a budget is so important, especially for beginners who are looking to build wealth.
Find the perfect budgeting method that best fits your personality. It doesn’t need to be a strict budget, but by following a budget, you will know your cash inflows (i.e. income) vs. cash outflows (expenses).
If you’re looking for ways to build wealth, then understanding where your money goes and how it gets spent matters.
Inspired by Gail Vaz-Oxlade’s savings and budgeting strategies, I initially created a free budget template printable for myself. After having major success with it, I would love to share this free resource with you.
Sign up here to get your copy so you can start creating wealth with a good budgeting plan.
Related post about how to create a budget:
- 101 budgeting for beginners
- What is the 50/30/20 budgeting rule and how it works
- Which payment type can help you stick to a budget?
2. Live below your means
It doesn’t matter if you earn over $100,000 per year when you’re spending all or most of it. Just because you have a high income it doesn’t make you rich if you’re not making your money work for you.
You hear of stories like lower-wage earners who were able to consistently save and build wealth over the long term by living below their means.
It’s not to say to cut back on your guilty pleasures, but it all goes back to creating a budget, understanding your spending behavior, and prioritizing your needs plus wants.
If you find that you’re stretching it too far, then it helps when you look for creative ways to make extra money which I talk more about in a bit.
3. Have a passion for savings
People who are serious about building wealth have a passion for savings. They are even more passionate about making more money. It may sound a little absurd, but it’s like a game to them.
It doesn’t matter if you’re just a beginner at this journey who’s looking to save $1,000 or $10,000 per year. Saving money isn’t about being a cheapskate or going dumpster diving to pinch all your pennies. It’s about being frugal (again, frugal and NOT cheap), and being able to buy things that give you more value for the same price.
For example, I love Starbucks and I’m not willing to cut back on their drinks just to save money. Instead, I keep an eye out for promotions so I can get free Starbucks drinks more often.
Overall, it helps when you have an interest in spending some time to find ways to save money on the products you love.
If not, then you’ll find yourself paying regular prices a lot of the time.
4. Look for free money resources
If only we had unlimited time in the world to work, we wouldn’t have to worry about where to get money. Unfortunately, you can’t juggle all of the jobs you love to do while still keeping your sanity intact.
But what if I told you there is a way for you to get your hands on free money instead? Yes, you won’t have to work or do anything that requires a lot of strength or brain power to earn it. Although it sounds too good to be true, it’s not far-fetched. There are many ways for you to get money for free during your downtime, with minimal effort.
One way that I love to share with everyone is taking surveys with the best survey sites like Swagbucks and Branded Surveys. With these websites, all you have to do is answer a few questions, watch videos, play games, or surf the internet, and you can get points towards rewards like free gift cards or free cash through PayPal.
You can do these activities while you’re taking a break from your work or waiting to fall asleep. Imagine that! You can make money while scrolling on your phone!
Another way to get money for free is by making use of cashback apps like Rakuten and Drop. Every time you purchase something that you’re going to buy anyway, you’ll get part of your money back. Not having any cashback apps on your phone is a bummer because who wouldn’t want to get paid while shopping?
Here are some ways to get free money. Honestly, with a bit of research, you’ll be amazed at the options out there. These small wins won’t make you rich, and I wouldn’t recommend pouring all your energy into them. However, earning a little extra on the side could help fund a nice trip to Punta Cana or a new laptop for home use.
- The best places to get free stuff on your birthday with no catch
- The best cash back apps to save money
- How to earn free Amazon gift cards online
5. Find free stuff online
One of the reasons we find it hard to build wealth is because we keep buying things. Sure, there are many items that we need to buy, and there’s nothing really wrong with buying what you want. But these expenses stack up, and before we know it, our money has already evaporated into thin air.
So what can we do about it? Sometimes, you have to be an explorer. By that, I mean that you should start exploring ways to get free stuff online.
Yes, it’s not only free money that you can find online. There are many people or businesses giving away their things for free. You will be surprised at what you can find! Personally, I’ve come across clothes in perfect condition, almost-new furniture, and fully functional gadgets being given away.
The key here is knowing where to look.
What I normally do is visit websites like Freecycle or Facebook Marketplace. When I’m on a tight budget and in need of something, I check these platforms for items available for free. Often, I find that the items are in good condition and can be used for a long while.
I recommend trying to find items for free before buying new ones. Over time, these savings will add up hugely and knock your socks off. Not only are you saving money, but you’re also reducing waste by repurposing items and giving them a new life.
6. Sell your old stuff
While it might not seem like a massive ROI in the grand scheme of things, this approach can certainly help jumpstart your wealth-building journey. You’d be amazed at how much money you can earn and accumulate simply by selling items you no longer need.
I once underwent a major decluttering phase and sold items that together brought in several thousands of dollars. I invested those earnings in the stock market, and over the years, I saw growth in that investment, all from selling things for money.
What was “junk” to me became treasures for others, as they found value in my cast-offs. From old clothing and shoes to jewelry, handbags, gadgets, and even that old car you’ve stopped driving— everything can find a new home and pad your wallet in the process.
You can check out the best apps to sell your clothes online when you desperately need cash. I also wrote a separate article that tells you where to sell your shoes for money.
7. Flip items for cash
Besides selling your items for cash, you can also scour for hidden treasures and flip them for a profit. This could range from vintage finds to neglected furniture yearning for some TLC. In the past, I loved to hunt for old furniture and flip them for a profit. It was such a fun hobby that didn’t feel like a job at all but I was actually making money!
I’d often acquire free furniture or spend no more than $10 on pieces that showed immense potential. Through this flipping side gig, I managed to pocket an extra $500 to as much as $1,000 monthly. I did this just as a leisure activity in my free time. The proceeds either funded my vacations or went directly into my savings. From there, an auto-deposit would channel the money straight into my automated investment account.
While the income wasn’t passive (it was indeed active), flipping furniture was entertaining, and it undoubtedly contributed to my wealth’s growth.
Once you’re done flipping your furniture, you can check out the best places to sell your furniture.
You may also want to learn how to make money woodworking.
8. Get out of debt
Okay, we’re not going to go into technical details.
We hear about good debt vs. bad debt. We hear about how borrowing money at low rates to invest is a good way to build wealth.
We’re not going to be talking about that sort of debt here.
When we say get out of debt, we mean to get out of consumer debt or any debt that causes you to not sleep at night!
Let’s assume you’ve racked up a ton of credit card debt or that you owe your friends a lot of money! Any interest payments that go towards loans are making you poorer each day, so it’s important to pay off your debt as soon as possible before you think about building wealth!
If you can’t get through the first step of reducing your debts, then it will be hard to save, invest and build wealth for your future.
Related post on how to build wealth: Should I Save or Pay off Debt?
9. Make extra money
Living below your means and saving money is essential. However, there’s a limit to how much you can save without feeling like you’re missing out on life’s pleasures.
While saving is crucial, focusing on increasing your income or finding ways to earn extra money can significantly boost wealth building, especially during your 20s, 30s, and 40s. Even in your 50s!
Yes, saving reduces expenses. But earning more can help you in several ways: saving more, investing more for retirement, and allowing more leeway to indulge in what you love.
Clearly, having an additional income stream can pave a smoother path in your financial journey.
A few ways to begin earning extra include starting a blog or flipping furniture. I engage in these activities and they’ve increased my income by several thousand dollars monthly.
If you’re genuinely keen on bolstering your home-based earnings, there’s a multitude of creative ways to make an extra $100 a day guaranteed.
I also have these other articles that will help you earn more money over time:
10. Change your mindset and focus on earning more
Earning extra money is one way to earn more.
But what about finding ways to increase your salary or even starting your own business to help people solve a problem?
The people with a rich mindset focus on earning more through serving others.
According to self-made millionaire, Steve Siebold, he wrote:
“While world-class thinkers understand the importance of saving and investing, they direct their mental energy toward accumulating wealth through serving people and solving problems,”
You can learn more about how rich people think by reading Siebold’s best-selling book here.
11. Invest your money
Have you paid off your consumer debt?
Established a savings plan and secured an emergency fund?
If the answer is yes, then fantastic! You’re on a solid foundation, and it’s the perfect time to enter the world of investing. From my experience, investing is the fastest way to build wealth— far more effective than just saving and penny-pinching!
According to the National Study of Millionaires by Ramsey Solutions, three out of four millionaires (75%) attribute their success to consistent investing over an extended period.
Aside from investing in ETFs, there are other avenues to grow your wealth. These include investing in real estate like family properties or Airbnb, diving into cryptocurrency, launching a business like blogging for money, or exploring passive income opportunities.
12. Improve your credit score
Did you know that an excellent credit score can save you several thousands of dollars?
The better your score, the less interest you’ll pay.
To boost your credit score, ensure you settle all your credit card balances IN FULL each month. Additionally, punctually pay all your bills, including those for the internet, cell phone, insurance, student loans, and more.
Understanding the significance of your credit score in wealth-building is crucial. It’s vital to know where you stand so you can work on enhancing your score, ultimately saving more and building wealth.
13. Read personal finance books
Educating yourself about personal finance by reading the best-selling books can help you build wealth over a long period of time.
The Millionaire Next Door is a very popular and inspiring book that teaches you about millionaires and their wealth building habits.
I read a ton of personal finance books when I was looking for an answer to how to become a millionaire. But this one book opened up my eyes and made me realize that there are a lot of wealthy people with low to average incomes who spend less than they earn.
Overall, this book presents interesting facts about low vs. high-income earners, and it really inspired me to live below my means.
If you haven’t read it, I strongly encourage you to pick up your copy because a lot of the facts in this book may shock you.
Another personal finance book I highly recommend picking up if you are looking for tips to build wealth and get rich is Rich Dad Poor Dad by Robert T. Kiyosaki.
You can also read my book review on Rich Dad Poor Dad for more details.
How to build wealth at any age
When is the best time to start building wealth?
If you’re a young and ambitious 20-year-old, you’re probably trying to look for the fastest way to build wealth because you want to be rich in your 20s.
If you’re in your 30s today, you may be wondering how to create wealth in 10 years so that you can live a better life in your 40s.
And if you’re in your 40s, you may be a bit worried because you’re halfway into your career earning your highest income without a retirement plan.
The answer is there’s no best or right time to start creating wealth, but it certainly helps a lot when you start earlier.
One thing’s for sure: you can learn how to build wealth at any age.
With that said, it’s never too early or too late to get started. In fact, the best time to start is right now since you are on this page reading about the ways to create wealth.
How to build wealth in your 20s
One of the best times to start saving money and building wealth is in your 20s.
It’s not to say you should spend all your time hustling for money and living under a rock just so you could sock away all of your savings.
After all, your 20s is the time you should be partying and having fun but it’s also important to acknowledge what wealth building is and starting a savings plan as early as possible so you won’t regret it down the road.
Trust me, when you learn how to build wealth in your 20s and save your first million dollars, you’ll reduce financial stress and live a much more comfortable lifestyle 10+ years down the road.
If you’re still living with your parents or flying solo with no family responsibilities, you have it much easier now, so take advantage of the fact that time is on your side!
How to build wealth in your 30s
If you haven’t gotten started yet with creating wealth or saving for retirement, then it’s time to start now!
You’re now officially a “responsible adult,” and your living expenses aren’t going to get any cheaper from here on. With 78% of workers living paycheck to paycheck, it may be tough to save and invest while covering for your daily expenses.
But with the right budgeting and savings plan, you can still achieve your dreams of financial independence.
Be sure that you continue to live below your means and set aside at least $1,000 in an emergency fund. Aim to have all your debts paid off before you start investing.
Also, don’t forget to max out your retirement savings fund by taking advantage of your employer’s contribution match.
According to Fidelity, you should set aside at least 15% of your pre-tax income each year for retirement. When you get contribution matches from your employer, it makes saving money easier for you. It’s like getting free money, so you don’t want to miss out on benefits like these.
Summary of how to create wealth
Whether you’re in your 20s, 30s, 40s, or 50s, it’s never too late to start creating wealth so you can reach financial independence sooner.
Learning how to build wealth involves three components which are earning, saving, and investing money.
But before you get started with growing your wealth, be sure to pay off all your consumer debt first. Only then can you really be in the position to start saving money for your retirement.
Here is a quick summary of how you can start your wealth building journey:
1. Follow and create a budgeting plan that best fits your personality.
2. Live below your means by spending less than you earn.
3. Learn to have a passion for savings by looking for coupons, free money, and the best deals on products you love.
4. Look for free money resources so you can save money or earn extra money for free.
5. Set a plan that will allow you to pay off all your debts before you get started with investing and building wealth.
6. Find creative ways to make extra money on the side for additional income.
7. Change your money mindset by focusing on increasing your earnings that are beyond making extra money.
8. Whatever additional earnings and savings you have left, be sure to park them into investments that align with your risk tolerance profile.
9. Don’t forget that building up your credit score during your wealth building journey can help you save thousands of dollars over a long period of time.
10. If you’re excited to learn more about saving money and wealth building strategies, pick up a few personal finance books written by personal finance experts who can help you with wealth creation.
Readers, are you ready to start building wealth today?
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I’m 71 yrs old. I hope it’s not too late for me. I’m single & retired but still struggling!
@Margo – It’s never too early or too late for anything! Let me know how it goes!
This is the best thing I’ve seen
I personally enjoyed reading this blog and the building wealth strategies you talk about. I like hearing about your experiences and how you save money and make money online. Your articles also makes me want to consider starting a blog for extra income as well. Take care!
Thanks Cody.
I’m glad you enjoy reading my personal finance, saving/making money tips, and blogging posts. I learned a lot about making money online after starting my blog. 🙂
I wish you the best when you start yours!
Ling, there is so much good stuff here! I totally agree with all of this. Being conscious of your finances and having some kind of plan is so important to achieving your goals. And for couples, it’s essential to have regular “money talks” so that both partners know the financial situation and can work together.
Hi Kari!!
I’m glad you found there’s a lot of good stuff about building wealth here. I agree that being conscious of where your money is going and having a solid financial plan is an important step when it comes to learning how to manage your money and build wealth.
Thank you for your thoughtful comment! 🙂