As you might know, building wealth is not exactly the easiest thing in the world. Especially if you want to reach a point where you no longer have to work, also known as financial freedom.
The good news is that you are here, which clearly indicates that you’re not one of these overconfident guys who think they’ll get rich by accident.
In this article, you’ll discover the 30 best wealth building strategies that can help you along the way. They are categorized into three main pillars, saving, increasing income, and investing. Every pillar must be mastered to become and, equally important, to stay wealthy.
- The Best Wealth Building Strategies for Saving
- How To Build Wealth From Nothing? – Income Increasement
- Final Step in Wealth Creation: Investments
- Conclusion On The Best Wealth Building Strategies
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1) The Best Wealth Building Strategies for Saving
I know, I know, saving can’t make you rich, right?? How is cutting down on costs and saving a couple bucks per week going to make me a millionaire?
It won’t. Increasing your income will. But we’ll get to that further down in the article. First, we have to talk about the basics. If you’d like to build up your net worth, your income must exceed your expenses! There is no way you can turn things so that’s no longer the case.
Therefore, before diving into the wealth building strategies regarding your income, we’ll take a closer look at the more uncomplicated of the two points: your expenses.
Here are 10 things to consider when looking to cut down on your bills:
1. Budgeting: Think of budgeting as a roadmap for your money. You plan where every dollar goes. Some for bills. Some for fun. Some for savings. It helps you see the big picture. Where’s your money going? Are you spending too much on coffee? Or maybe those online shopping sprees? With a budget, you’re in control. No more wondering where your money went.
In my opinion, this is the absolute first thing you should do. No matter your income or net worth, you have to know where your money is flowing.
2. Emergency Fund: Life’s full of surprises. A flat tire. A broken fridge. A sudden job loss. An emergency fund is your immediate safety net. It’s money set aside just for these surprises. You hope you never need it. But if you do, it’s there. No need to borrow or stress. You’ve got it covered.
Not having an emergency fund is a mistake I see many people make. Either they don’t have the income, or they rush into investing. Investing is fine, but if you have no cash at your disposal, you could be forced to sell when the prices are low. This is, of course, an unnecessary risk and expense.
3. Cut Unnecessary Expenses: Talking about unnecessary expenses… We all have those little luxuries. Maybe it’s that fancy coffee. Or the premium streaming service. But do we need them all? Cutting back doesn’t mean living without fun. It’s about choices. Maybe cook at home more. Or watch a movie at home instead of the theater. Little changes can add up.
I don’t want anyone to think that living like a homeless person to save some extra pennies is worth it. It is, however, a good idea to take a closer look at your budgeting (remember point one?) and decide for every single thing on the list if it is worth its price. You don’t have to overthink it all day; just be smart about it.
Is the CHF 5 coffee worth its price? Yes? – Good, keep it, and enjoy it! No? – Good, make your own coffee at home, and save the bucks.
Don’t overcomplicate it.
4. Shop Smart: Deals. Discounts. Sales. They’re everywhere. Before you buy, do a quick check. Is it cheaper somewhere else? Can you get a discount? Or cashback? Shopping smart isn’t about being cheap. It’s about getting value. Your money’s hard-earned. Make sure you get the most out of it.
In my experience, asking for a discount goes a long way, especially for expensive purchases!
A while ago, I bought a course that would have been $4000. As I did my research on the internet, I saw that there had been a 75% discount on Black Friday a couple of months before. The following picture shows the email I used to get the course for $1000. Notice I didn’t directly ask for such a high discount but rather just mentioned it. Otherwise, it could have come across as rude.
5. Automate Savings: Out of sight, out of mind. Set up an automatic transfer. Every month, a bit goes from checking to savings. You won’t even notice it. But your savings will grow. It’s like a little money fairy working in the background. Before you know it, you’ll have a nice little stash.
In my experience, it’s worth setting up another bank account just for your savings. It’s easier to keep an overview of your net worth, and it gives you a psychological win every time you see a bigger number than the month prior.
6. Reduce Debt: Debt’s like a leaky bucket. You try to fill it, but money keeps dripping out. Interest on loans or credit cards can eat up your money. Focus on paying them off. Start with the high-interest ones. Every dollar you pay off is three dollars saved. And once you’re debt-free? Oh, the freedom!
It’s incredible how many people get stuck in credit card debt, car loans, etc. Reducing debt is probably the single most important factor when you want to build up your wealth. It’s absolutely basic. You must do it. Do it now!
Using debt is a valid option once you have money already, but if you don’t, it becomes a deadly trap. Of course, you can get good cashback deals with some awesome credit cards, but only if you don’t use the partial payment option.
7. Tax Planning: No one likes taxes. But they’re a part of life. The good news? There are ways to reduce them. Maybe it’s a tax break. Or a deduction you didn’t know about. Work with a pro. They’ll help you find ways to save. Every dollar you don’t pay in tax is a dollar in your pocket or your investments.
8. Refinance: Got a mortgage? Or a big loan? Check the interest rate. Can you get a better deal for your loan? Refinancing can lower your payments. It’s like a sale on your loan. But be careful. Read the fine print. Make sure it’s really a better deal.
9. Buy Used: I know, new is nice. We all like it. But used can be just as good. And a lot cheaper. Cars. Books. Expensive clothes. Buying used can save you a bundle. And with the internet, it’s easier than ever to find good deals.
By the way, you can get used stuff in every price segment. For example, some of my own used goods include a luxury watch and a fine leather coat. Both look brand new, and I saved a couple thousand dollars buying them second-hand.
10. Limit Luxuries: We all like to treat ourselves. And that’s okay. But maybe not all the time. Limit those luxury buys. Make them special. Not only will you save money, but you’ll also appreciate them more.
Be especially careful with things that have a rapid reduction of value, such as cars.
Saving isn’t about being stingy. It’s about being smart. Every dollar saved is a step closer to your goals. Whether it’s a dream vacation, a new home, or complete financial freedom. Every bit counts as long as you don’t sacrifice your daily life by being cheap.
2) How To Build Wealth From Nothing? – Income Increasement
OK, let’s leave the basics behind and get to the most important part of wealth creation. And, in my opinion, the fun part!
You can only decrease your expenses so much until it becomes a pretty bad deal. In the end, you’ll have no choice but to increase your income.
So, here are 10 things to consider in your wealth building strategy regarding income:
1. Side Hustles: Think of this as your mini-business. Maybe you’re good at baking. So, you sell cakes on weekends. Or perhaps you’re a tech whiz. You could fix computers in your free time. Side hustles are about using your skills outside your 9-to-5 job. It’s extra work but also extra cash. And who knows? Today’s side hustle could be tomorrow’s big business.
If you’re really serious about making money, picking the right side hustle is a meaningful step. You have to think deeply about every idea and whether it is scalable or not. I personally am a huge fan of internet-based businesses because the scale is built right into it.
For internet side hustle ideas, visit this article.
2. Real Estate Crowdfunding: Here’s a twist on property investing. Instead of buying a whole property, you chip in with others. Together, you fund a real estate project. It could be a new apartment block or a shopping mall. Once it’s done and starts making money, you get a share. But remember that projects can fail, so always do your research.
3. Sales Jobs: In sales, you’re the master of your earnings. Most sales roles offer commissions. This means the more you sell, the more you earn. There’s no cap. Unlike a fixed salary, where you earn the same no matter how hard you work, sales rewards effort.
Sales also teach you valuable skills. Negotiation. Persuasion. Reading people. These can be used in many other careers.
Sales isn’t for everyone. It is extremely tough in the beginning! You’ll face many, many rejections. But if you’ve got the grit and the gift of the gab, it can be an especially lucrative path.
Good salespeople are always in demand. Every company needs to sell, right? So if you’re good, you’ll find opportunities everywhere. Even as a job on the side, you can make a solid income.
4. Online Courses: Everyone’s good at something. Maybe you’re a guitar hero. Or perhaps you know everything about gardening. Why not share your knowledge? Create an online course. People pay to learn from you. It’s a win-win. They gain a new skill, and you earn some cash. Plus, once the course is made, it can sell over and over. You can put time into it once and earn some side cash from it for years.
5. Write a Book: Got a story in you? Or maybe some expert advice? Put it on paper. Or, well, on screen. E-books or physical books, both work. Every time someone buys, you earn. It’s simple but not easy, though. Writing takes time. And getting published? That’s a whole other challenge. But if you make it, it’s not just money. It’s also leaving a positive imprint on people’s lives.
Books are one of the best offline products for wealth creation. While the internet is great, we sometimes tend to forget that there were thousands of multi-millionaire authors before it was invented. Books are almost as easily scalable as digital products. Need more books? – No problem, let us print a couple thousand more. On top, once it’s written, books are incredibly passive and can blow up at any time.
One example of this is Robert Greene. His most famous book was published 25 years ago and now sells better than ever.
6. Affiliate Marketing: Here’s how it works. You promote a product. People buy it through your recommendation. In most cases, you’ll have a special link that gives you credit. In return, you get a commission. It’s like being a salesperson but online. You could write reviews, create social media content, or make videos. The key is trust. If people trust your word, they’ll buy.
Affiliate marketing is an absolutely wonderful thing. You can earn from multiple products without having to create one on your own. It’s not your product, you don’t have to be concerned about reviews, and customer service is none of your business either. A big additional advantage is, of course, the scale. If you promote products in evergreen content like, for example, YouTube videos, you can earn commissions from content you produced years ago.
Sounds too good to be true, right? – Well, let me tell you the downside of being an affiliate. It’s actually simple: You have to have an audience. This means you have to actually be good at marketing. Making money is the easy part, getting that YouTube channel or Instagram account up to a significant amount of views is a whole different animal.
7. Rent Out Your Space: Got a spare room? Or maybe a parking spot in the middle of a city? Rent it out. Sites like Airbnb make it easy. Travelers get a cozy place to stay, and you get paid. But it’s not just about money. If you like, you’ll meet people from all over. Hear their stories. Share yours. Just make sure to check the rules. Some places have strict rental laws. Other than that, it’s a fast and easy thing to do.
Renting out something is a really fast and easy way to make some side cash. In my experience, the demand is higher than people think. You can rent out pretty much everything, from cameras to cars, bikes, fitness equipment, or, of course, space.
Here’s a personal example:
Since I have a pretty decent home gym, some people in my neighborhood like to come to my basement for a workout. In my case, I let them in for free, but they contribute financially when I buy new weights and machines. However, I easily could have charged them something per month or per workout.
8. Consulting Or Tutoring: You’ve got experience. Years in a job. Skills. Knowledge. Why keep it to yourself? Offer your expertise. Companies or individuals might pay for your advice. You’ve walked the path. Now you can help others do the same. Build a good reputation, and clients will come.
Consulting or tutoring is awesome because you don’t need to invest any money to start. If you do it online, it’s even better, and you can make a ton of money! Don’t believe me? – Well, read what I experienced at university:
In my first year, there was a guy who offered online exam preparation courses for every module related to math. On average, about 50 people would sign up per course every semester. He charged CHF 50 per day, and the course took 4 days. Students, me included, were more than happy to pay that since the course was outstanding and had a good reputation.
He made about CHF 10,000 per module per semester by tutoring a couple of days. Imagine that kind of money from a simple, inexpensive side hustle!
9. Digital Products: Think of things you can sell online. Maybe it’s a cool software. Or a catchy ringtone. Digital products are great. You make them once, and they can sell forever. No shipping. No storage. Just pure profit. But, making them takes skill. And selling? That’s a challenge too. You’ll need a good marketing plan.
Digital products face the same challenge as affiliate marketing. If the audience isn’t there, you can’t sell anything. However, if you do have an audience, a digital product is probably the best way to make money. That is because, compared to affiliate marketing, you’ll earn 100% of the price and not the usual 3-10%. Another advantage that an own product has, is that you can set up an affiliate program yourself. If your product is solid and offers real value, this can quickly become an incredibly passive gold mine.
10. Licensing: Created something unique? A picture you took with your camera? A design you created? License it. Let others use or sell it. In return, they’ll pay you a fee. It’s like renting out your idea or creation. Every time they make money, so do you. But be careful. Protect your idea. Get the right legal advice, and make sure you get what you deserve.
There are great ways to monetize some hobbies this way. The best example is photography. If you take high-quality pictures that people could use for ads or decoration, you can easily sell them on various platforms. So, if you take the pictures anyway, why not make a little side cash from them?
Increasing your income is always about spotting opportunities. There are hundreds of thousands of untapped business ideas around you! Look around. What can you offer? What do people need? What service or product is missing? What problems do people have, and how could you fix them?
Find the match, and you’re on your way.
3) Final Step in Wealth Creation: Investments
If you’re at a point where you have your expenses under control and an income that exceeds your bills, it’s time to think about wealth building strategies related to investments. Sure, you could just stack up all the excess in your bank account, but you’d leave a massive opportunity on the table.
Investing is your best friend when trying to create wealth for yourself or your family. That is because in the other two areas, saving more and earning more, you’ll have to work and suffer for an extended period of time to see results.
Investments, on the other hand, don’t require you to work on it constantly. While there are different degrees of passiveness in different investments, most of them are not time-intensive. In fact, that’s the whole idea behind investments; to invest your money to make money, not your time.
Here are 10 investments to consider in your wealth building strategy:
1. Stock Market Investing: Imagine owning a tiny slice of a big company. That’s what stocks are. When you buy stocks, you’re buying a share of a company’s future. If the company grows and makes money, so do you. Your stock’s value goes up. But it’s not always sunshine. Companies can lose value, too. If they do, your stock’s value drops. It’s a bit like a roller coaster. Some days up, some days down. The key is patience and research.
2. Real Estate Investing: This is about bricks and mortar. You buy a piece of land or a house. Some folks buy properties in bad shape, fix them up, and then sell them for more. This is called “flipping.” Others buy and hold. They rent out their properties. Every month, the rent rolls in. But, properties need care. Roofs leak. Pipes burst. And sometimes, tenants can be a handful. It’s not just about buying; it’s about managing too.
3. Bonds: Think of bonds as IOUs. You lend your money to a company or the government. In return, they give you a bond. This bond promises to pay back your money with some interest on top. It’s a safer bet compared to stocks. But the trade-off? – The returns are usually lower. It’s like lending money to a trustworthy friend. They’ll pay you back, but don’t expect to get rich from it.
4. Mutual Funds: Here’s a group project. Everyone puts their money into one big pot. A fund manager decides where to invest this money. It could be stocks, bonds, or other assets.
The idea is to spread out the risk. If one investment goes bad, others might do well. But remember, the manager takes a fee. And sometimes, even the best managers get it wrong.
5. Peer-to-Peer Lending: Imagine lending money to a neighbor for their new business. In return, they’ll pay you back with a bit extra. That’s peer-to-peer lending. But instead of your neighbor, it’s done online. Strangers ask for loans, and you can chip in. If they pay back, you earn interest. It’s more personal than a bank. But it’s also riskier. Not everyone pays back since not everyone’s business succeeds.
6. Cryptocurrency: Think of Bitcoin or Ethereum. They’re not coins you can hold, but codes you store. Their value can shoot up overnight. But it can also plummet just as fast. It’s a new frontier in investing. Some see it as the future of money. Others are more skeptical. If you dive in, be ready for a wild ride. And only invest what you can afford to lose.
If you’re interested in cryptos, you’ll find out that the risk involved is, like in stock trading, largely dependent on you. Even in crypto, you can play it safe. So don’t be scared to look into it just because you heard some stories about enormous risks and lost money.
7. Commodities: Commodities are raw materials. Things like gold, oil, or wheat. Their prices swing based on many factors. Weather. Politics. Global events. Investing in commodities is a way to bet on these changes. For instance, if you think gold prices will rise, you might buy gold. But remember, it’s unpredictable. Droughts happen. Wars break out. Markets change. It’s a game of research, timing, and a bit of luck.
8. Venture Capital, Wealth Building Strategy Of The Super Rich: Ever dreamed of backing the next big startup? That’s venture capital. You invest early in a new company, hoping it’ll grow big. If it does, your small slice could become a big piece of pie. But startups are tricky. Many fail before they even start. It’s high risk, high reward. You’re not just investing in an idea, but in the people behind it. Their passion. Their drive. Their vision.
Investing in startups is one of the things that eventually becomes a main activity in many wealthy people’s lives. If you have hundreds of millions, you can use your money to change the world. Many decide this is best achieved by investing in startups.
9. Collectibles: Some people invest in stocks. Others in vintage comic books. Collectibles are unique items people value. Maybe it’s a rare stamp. Or a piece of art. Or a limited edition. Over time, as they become rarer, their value rises. But this is another investment that is not just about money. It’s also about passion. The thrill of the hunt. The joy of owning something special. But, like all investments, there’s risk. Tastes change. What’s in demand today might be out of favor tomorrow.
In my opinion, owning collectibles as a wealth building strategy is an awesome way of living! That is because instead of having your money placed somewhere in the dark to let it grow on its own, you can actually use it! And still enjoy the increase in value!
Instead of having a larger portfolio, imagine a garage full of vintage cars, a wall full of beautiful paintings, or a showcase of limited-edition luxury watches.
10. Forex Trading: The world’s currencies are always moving. The dollar against the euro. The yen against the pound. Forex trading is about betting on these moves. It’s fast-paced. The market never sleeps. Traders need sharp instincts and a keen eye on global events. A political shift here. An economic report there. They all sway currency values. It’s a world of strategy, nerves, and, sometimes, a bit of gut feeling.
Investments give you the incredible chance of having your time decoupled from your income. In a job, you get an hourly wage, and that’s it. No money without time. If you have investments, that is no longer the case. You get paid no matter what you do.
For this reason, every wealthy person on this planet has investments of some kind, and so should you. After managing your savings and income, start looking into investments as soon as possible!
Each investment has its own charm and challenge. The trick is to understand them. Know where your money’s going. And always, always do your homework.
The best investment tip I can give you is to never invest in something you don’t understand, be it a business idea of a friend or trading on the internet!
4) Conclusion 🎓
When thinking of wealth building strategies, you must focus on three core pillars: smart saving, proactive income enhancement, and strategic investing.
Smart Saving: This is the foundation. While saving alone won’t make you rich and can’t be considered a real strategy, it ensures you spend less than you earn, creating a financial buffer for future opportunities.
Income Enhancement: Beyond saving, it’s crucial to actively seek ways to boost your income. Whether through side hustles or leveraging skills, the goal is to diversify and increase earnings. This is by far your best bet for becoming wealthy.
Strategic Investing: With savings and a stable income, the world of investing awaits. This is where your money starts working for you. From stocks to real estate, each avenue offers potential rewards and risks. The key? – Stay informed and invest wisely.
In conclusion, the journey to building wealth is multifaceted. It’s not just about accumulating money but also about understanding money, making it work for you, and enjoying the freedom and opportunities it brings.
With patience, consistency, and a keen eye for opportunities, anyone can pave their path to financial success.