So, you want to be rich. Believe it or not, getting rich is not out of reach for the average person. In Thomas Stanley’s book The Millionaire Next Door, his study shows that 80% of the millionaires he surveyed are first generation wealthy.
They created their wealth by working hard to earn money, and by learning how to manage that money in a way that created an environment that was primed for financial growth.
If you are serious about getting rich, read on. I’m going to be honest right up front and tell you that there is no such thing as a get rich quick scheme that actually works. That’s why they call them get rich quick “schemes”.
A “scheme” by definition is a “clever and often dishonest plan to do or get something”. Getting rich via playing the lottery, going to the casino, or being involved in a pyramid scheme is not a likely reality and generally only results in losses of big amounts of money and diminished wealth.
However, if you are willing to work hard and follow a road map similar to the one I’ll outline below, you can greatly increase your chances of getting rich, and in less time than you probably think.
The Two Main Ingredients for Growing Wealth
Getting rich takes two basic ingredients:
- The willingness to work at increasing your income. (If necessary. Those of you with higher incomes – over $150k – have a very good chance of getting wealthy on your current salary.)
- The willingness to research and implement the path of growing your money that is right for you (more on that later).
It really is that simple. If you are willing to take the time to do these two things, millionaire status almost certainly is in your future.
For instance, if you can find a way to save or earn $1,500 per month and you invest that money at an interest rate of ten percent for twenty years, you’ll have $1,087,480 in cash. If you invest $2,000 a month at the same rate you’ll reach millionaire status in 17 years.
And if you invest $3,000 a month at that same ten percent interest rate, you’ll be a millionaire in just 14 years.
While fourteen, seventeen or twenty years might seem like a long way away, I can guarantee you the time will fly by quicker than you think it will, so you may as well spend that time getting rich.
So, if you want to be rich, you need to have a specific plan for the two key ingredients mentioned above: increasing your income, and growing your money (i.e., making your money work for you so you don’t have to).
Let’s break down these keys a bit further so I can show you in detail how to get it done.
Increasing Your Income
The fact of the matter is that the more surplus income you have available at the end of each month, the faster you will reach your desired level of wealth.
There are several ways you can increase your income in order to help you reach your goal of getting rich.
Start by Cutting Expenses
The fastest way to increase your monthly surplus is to reduce your expenses. I’m assuming you already know the importance of budgeting and are using a monthly budget.
After you have listed all of your monthly expenses on the Financial Gameplan Form or another type of spreadsheet, go through them one by one and have a serious discussion about how you can reduce or eliminate each monthly expense.
If you are married, be sure to complete this exercise with your spouse.
This step will likely require a serious analysis of what is truly important to you and some self-talk about how badly you want to achieve your financial goals.
For instance, you may not want to cancel your cable TV subscription with all of your sports channels, however you need to decide what is more important to you: watching sports on cable TV or not being tied to your job because you’re wealthy and don’t need the cash?
Check out this article on 6 Cord Cutting Alternatives to Cable TV to help you get your TV fix for cheaper.
Is eating out regularly more important to you, or is it worth it to forego restaurant trips for a period of time so that you can afford to eat anywhere you want later?
As Dave Ramsey so wisely asks: “Are you willing to live like no one else lives now so that later you can live like no one else lives?”
You can also work to cut expenses on necessity items such as insurance by shopping around for cheaper rates. Or you can think about transitioning to cheaper housing in order to save money on housing costs.
It might seem as if the sacrifices you have to make regarding spending in order to increase your surplus income are tough, but it will be well worth it when you are in a situation where you are not dependent on anyone else for making sure you have the things you need and want.
It’s important to note as you are working to cut expenses that you have to decide what expenses are not worth cutting so that you can get rich faster. Everyone has those things they are not willing to live without for the purpose of getting rich.
For some people, it’s their pets. For others, it’s their kid’s favorite extracurricular sport. As you go through your expenses, work to determine what you will and won’t live without in order to reach your goal of being wealthy.
Be willing to sacrifice, but do so without giving up the things that are most important to you. After all, you don’t want your journey to wealth to be absolutely miserable. Instead, you’ll want to get rich in a way that motivates you by keeping important things in your life.
After you’ve gone through every line item on your budget and cut expenses in a way that maximizes your monthly surplus income but still allows you to live life in a way that is acceptable to you, you can work on finding other ways to increase your surplus; i.e., making more money.
Legit Ways to Make Money Now
If you’ve done all you can do to cut your expenses in a way you can live with, you do have the option of making more money in order to get rich faster.
The first question you should ask yourself now is “How can I make more money in a way that fits in with my lifestyle and my priorities?”
Can you pick up overtime hours at work? Are you willing to work a second job? Would you rather have a more fluid commitment and do some side hustling? Here are a few side hustle ideas for you that might fit in with your “get rich” plan.
10 Great Side Hustle Ideas
There are dozens of side hustles you can do to increase your income. Here are ten of the most popular we see people doing in order to reach their financial goals.
1. Become an AirBnB host. Do you have an extra room in your house that you could rent out to travelers? AirBnB has a website where you can sign up to advertise a room – or even an entire condominium or house – to rent out for a day or two or even longer.
AirBnB room rentals are attractive to travelers because they cost less than a standard hotel room. AirBnB hosts can often get $50 a night or more for hosting people who are staying in their city for work or entertainment purposes such as a concert.
Or, they may just be traveling through your city on their way to a different destination and be in need of an overnight stop. If you like the idea of helping travelers and making cash at the same time, consider renting your spare bedroom or den out on AirBnB.
If you have spare time when you aren’t working at your regular job, and you have a fuel-efficient vehicle, a side hustle with Uber or Lyft might be a good way for you to make more money. For more information on making money with Uber or Lyft, check out these articles:
- How He Makes $600 a Month Driving for Uber
- WKW Podcast 84: How to Make Money Using Lyft and Uber with Harry Campbell
3. Open an online store. Did you know there are ways you can own your own online store, in some cases without actually having to house and ship products?
Sites like Shopify assist you in setting up your own online store for selling your own products, or helps you set up to run a drop ship web site that collects orders for other companies and gains a commission in the process.
4. Advertise on your car. If you’ve got a nice car, you may be able to make money by letting companies use your car for advertising. Companies such as Carvertise hook car owners hoping to make a few bucks each month up with companies looking to advertise.
As a car owner, you allow the Carvertise client to have a wrap put on your car. As you drive around, people see the advertisement for the company, and you get paid a monthly stipend.
5. Sell your services. Are there tasks you can do for people near you in order to make extra money? Are you good at fixing minor things around the house? Could you clean houses for people? Wash cars?
Could you babysit neighborhood pets or children for extra cash? What about doing yard cleanup or lawn mowing? Decide which types of services you are best at providing (and like to do) and advertise with flyers delivered to homes or hung on local business advertising boards.
If you have a talent for providing services such as freelance writing, editing or graphic design work such as creating logos, you could make money by working online for various individuals or companies.
7. Become a Brand Ambassador. Brand Ambassadors (sometimes called Product Demonstrators) are those people who hand out free samples at stores such as Sam’s Club, Walmart and Costco. These types of jobs often pay well, starting out at $14 an hour or more.
8. Provide tutoring services. If you like working with kids – and sometimes even adults – you might like working as a tutor. You could work for a company that has tutoring centers, or you can advertise your services as a private, self-employed tutor on sites such as Craigslist.
You could also potentially work as an online tutor for sites such as SameSpeak. SameSpeak pays people to have pre-determined conversations (out of an online book they give you) with people hoping to learn to speak the English language more fluently.
You can earn up to $10 per half hour of work with sites like SameSpeak.
9. Virtual Assistant or Call Center Associate Jobs
If you like helping people, you might like working from home online as either a virtual assistant or a call center associate.
Companies work through sites like Outsourcely to find virtual assistants to help them with a variety of tasks such as social media management, data entry or light bookkeeping, among other tasks.
Or, you could start your own freelance virtual assistant business. My friend Kayla does this and she earns about $10,000 per month! She’s even started an online course to help others do the same.
Call center associates answer calls to company customer service centers and help assist callers with problems or questions. One popular company that hires work from home customer service reps or call center associates is U-Haul.
10. Data entry jobs. There are many companies that hire people to work from home doing data entry. If you have fast and accurate typing skills, you might like a side hustle in data entry. One popular company hiring data entry associates is Axion Data Entry Services.
There are also other options for making more money. If you would rather have a traditional part time job instead of a side hustle where you are often working for yourself, consider these options for increasing your surplus income.
- Delivering pizzas
- Cashier or stock-person
- Server, hostess or cook
- Working for a company that cleans offices at night
- Working at a company warehouse such as Amazon or UPS
- Working evenings as a customer service representative
The point is that there is money to be made if you are willing to take the time to make it, and finding that money by cutting expenses in your budget or earning that money via working a part-time job or side hustle will get you to “rich” faster.
Growing Your Money
This is the second ingredient needed to get rich quickly and legitimately. There are several ways to potentially grow your money. Some work, some might not. Some ways involve more risk than others.
One of the first things you’ll need to do as you decide the best way or ways to grow your money is to figure out what your risk tolerance level is.
Knowing your risk tolerance level is important because it will help you determine what avenues of financial growth you are more comfortable with.
For instance, higher risk mutual fund choices have the potential to produce a higher rate of return. They also have a higher risk of losing money.
On the other hand, lower risk mutual fund choices might not pay out as much in interest over the long haul, however they also come with a lower risk level and you won’t have as high a chance of losing your money.
It’s up to you (and your spouse if you’re married) to decide how much risk you are comfortable taking before you decide which path of growing your money is best for you.
Here is a risk tolerance quiz you can take to help. Note that these types of quizzes aren’t to be taken too literally, but they can help you figure out what your tolerance for risk is so that you can make more informed choices as to the type of investments that are better for you.
The Three Main Types of Investments
The wealthy generally get that way by doing one of three things:
- Investing in the stock market in some form
- Investing in real estate
- Investing in other avenues
Over time, these three avenues to wealth accumulation have been proven most stable. Let’s talk a little bit about each one in order to help you decide which one is best for you.
Investing in the Stock Market
The chart below shows that the real, adjusted-for-inflation return by investing in the S&P 500 from 1950-2009 yielded an average 7% return.
Some experts will agree with these numbers, while others will disagree, stating cases for higher total historical returns.
For instance as of June of this year, the S&P 500 had already reached a 9.7% increase in just half a year starting at January 1, 2017 according to this CNBC article.
The stock market will have its good years and its bad years, but overall, it’s a steady but lucrative investment option that has make people such as Warren Buffett very, very rich.
While investing in individual company stocks might sound exciting, history has shown that investing in some type of mutual fund, index fund or blue chip stock fund has provided solid and steady growth with an acceptable rate of risk.
So, the next question becomes: Which funds do I invest in? You can work with a certified investment planner to buy your stocks or mutual fund shares, however there are some important questions you need to ask first.
Questions like: Are you a fee-only advisor or a fee-based advisor?
Fee-only advisors charge a flat, up-front fee for their services and do not make additional commissions off of the products they sell. Fee-based advisors make commissions off of the products they sell to investors.
This type of advisor (fee-based) can be influenced by conflicts of interest when recommending products to their clients, whereas fee-only advisors don’t make additional money based on which investment selections you do or don’t pick.
Any investment advisor that sits down and works with you to create an investment portfolio will charge fees and it’s important to take those fee amounts into consideration before deciding whether or not you want to work directly with an advisor.
Another option for investing is to use what’s called a robo-advisor. Robo-advisors are digital platforms that are created to help you find investments that are right for you based on information you give them.
Because robo-advisors involve little human interaction, the fees for using them to purchase investments are much lower.
Ally Invest, for instance, has a robo-advisor option that allows investors to make trades and purchases for as little as $3.95 per trade. This is much more cost effective than the high fees that many investment advisors charge to meet with them personally.
If you do choose to use an actual investment advisor instead of using a robo-advisor, be sure to get several references and ask the advisor to be very clear about what the actual fees you’ll be paying amount to.
Having a somewhat varied basket of stocks, bonds and mutual funds that have a solid history of performing well can potentially be the best option for most people looking to grow wealth through stock market investing.
Investing in Real Estate
Investing in real estate is another common way people grow their wealth quickly. There are a couple of different options for investing in real estate.
- You can buy and hold your own investment rental properties
- You can invest in real estate via crowdfunding
Let’s talk a little bit about each choice.
Owning Real Estate Rental Properties
Owning rental properties has made many people rich. However, there are some things to consider before purchasing a real estate rental property.
The first question you should ask yourself is “Do I have enough money to put down?” Most mortgage companies require a down payment of at least twenty percent on investment properties.
So, if you’re purchasing a real estate rental property that costs $150,000, you’ll need a minimum of $30,000 down plus closing costs to purchase the property. There may also be repairs or upgrades that need to be made before the property is ready to rent out.
Those repairs and upgrades will require more out-of-pocket cash, and it’s important to ask yourself whether or not you are in a financial position to shell out that amount of money.
It’s also vital to think about the physical work of owning and managing rental properties. Do you have the time and physical stamina to meet with tenants, screen tenants, repair the properties, collect rent, etc.?
Or do you have the money to hire a rental property management company to take care of property management for you?
Owning real estate rental properties directly can help you grow your wealth, but it’s important to consider the time and money involved before you purchase a rental property.
Investing in Crowdfunded Real Estate
Investing in crowdfunded real estate is another option for potentially growing your money. Here’s how it works.
Reputable companies (PeerStreet, Fundrise and Realty Shares are three of the most popular) work with commercial and residential property investors who want to borrow money from them. After a thorough screening, if the loan applicant is approved crowdfunding companies offer “shares” of those properties to investors like you.
As a crowdfunded real estate investor, you have the potential to make money via owning shares in a variety of properties owned by real estate investors. Here are the guidelines for the three companies mentioned above.
PeerStreet invests in mostly short-term loans ranging from 6-24 months. They consider funding both residential and commercial properties. Here are the parameters for investing with PeerStreet.
- Minimum investment of $1,000
- Accredited investors only (accredited investors have an annual income of $200k for single people or $300k for married couples OR a net worth of $1 million.)
- Annual fee of 0.25% to 1.0%
Fundrise works with commercial investors only. They fund properties all over the United States, usually in large metropolitan areas such as Los Angeles, New York, Chicago and Dallas. Here are the criteria for investing with Fundrise.
- Minimum investment of $500
- Investors choose to put their money in one or more of three investment funds offered
- Non-accredited investors allowed
- An 0.85% annual asset management fee
Realty Shares funds commercial and residential real estate deals in a wide variety of venues. They might fund a commercial property investor looking to build a commercial office space, or fund a construction loan on a new home. Here are some of the Realty Shares investing guidelines.
- Minimum investment of $5,000
- Only accredited investors allowed
- 1% annual fee
- Investors choose individual projects to participate in
As you can see, the three companies offer real estate investment opportunities in different ways, however, the goal of all of them is the same: to help investors invest in real estate without having to own actual properties.
If you are thinking about investing in real estate but are unsure about whether or not you want to make the commitment to own and manage properties, crowdfunded real estate investing might be right for you.
Other Investment Options that Can Help You Grow Your Money
There are other ways for you to grow your money to get rich legitimately. You may want to start your own business or invest in an existing business.
Or you may want to explore other investment avenues such as peer-to-peer lending.
Peer-to-peer (P2P) lending is similar to crowdfunded real estate investing in that a group of regular people join together to fund a project.
In the case of P2P lending however, you would be funding loans instead of real estate projects. Potential borrowers come to a P2P lending company and submit a loan application for purposes such as debt consolidation or to get a lower interest rate on student loans.
The P2P lending company then offers shares of approved loans to their investors, along with information about the borrower and the potential earnings interest rate.
Companies such as Lending Club and Prosper allow you to invest by borrowing money to individuals and then collecting a portion of the interest rate they pay. Here are some of the criteria for investing with Lending Club or Prosper.
- Minimum investment $1,000
- Non-accredited investors allowed (except in Kentucky)
- 1% annual asset management fee
- Some states have an annual income requirement and there are a few states that don’t allow residents to invest in peer-to-peer lending companies
- Minimum investment $25 (you read that right)
- 1% annual fee
- Non-accredited investors allowed
- Other guidelines based upon your individual state
The point is that there are many ways you can invest your money in order to give it a chance to grow faster.
Educating yourself on the different ways you can legitimately get rich and invest your money is key, however. There are a number of get rich quick schemes out there you will want to avoid.
That being said, there are also ways you can take the money you save and invest it for solid growth potential.
Although waiting ten, fifteen or even twenty years before you get enough money that you consider yourself “rich” might seem like a daunting goal, it will be worth the work and the time you wait to put yourself in a secure financial position.
The more financially secure you are, the bigger your range of choices in life. Financial security allows you to have options about where you live, what you do for fun, how you help others, where you work – and even if you work.
Start on your path to getting rich today and start increasing the choices you have as you work to live the kind of life you want to live instead of the kind of life you have to live due to high debt and other financial obligations.
You deserve financial freedom.
What path do you plan to take in order to get rich quickly? Let me know in the comments below!
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