Most financial literacy books, youtubers and other financial advice sources will typically distill down building wealth into the points below, and that’s because there’s a proven roadmap and IT WORKS!

• 1. Create a Solid Budget
• 2. Emergency Fund as a Priority
• 3. Debt Management
• 4. Smart Investing
• 5. Take Advantage of Employer Benefits
• 6. Continuous Learning
• 7. Real Estate Investment
• 8. Entrepreneurship
• 9. Tax Planning

But how do I do this???

Even though I had this knowledge for years, I was still struggling to pay bills and living paycheck to paycheck because the simple fact was that I spent too much for the amount I earned.

Periodically, I would reflect on how much I was spending and start cancelling subscriptions, not eating out, etc., but eventually lifestyle creep would settle back in and I would be back to old habits.

Income – Expenses = Power for change

I was trying to figure out how to solve for the expenses, but I was looking at only half of my options. Even if you get that to 0, your ability to effect change in your life is limited by the income you take in.

There are plenty of money making strategies out there, start doing google searches and you’ll find tons, but at the same time the google algorithm will see your search content and what you actively engage in and start feeding you ads tailored to that interest category. That’s when I personally will get bombarded by get rich quick ads on youtube, etc.

Just be wary that this is bound to happen and you need to use your best judgement to avoid courses that you have to “Pay only $20 for this $600 dollar course and become rich!!”

Income via an employer

For me personally, for increasing the income part of the equation, I’ve realized it’s all about people and connections. If people know and like you, they’ll think of you as they have opportunities come up. I got hired by a huge tech company because of the relationships and trust I’d built contracting for them over the years. When I moved companies, I got an 80% pay bump. Was my job 80% harder? Hell no. I had a broader scope and more responsibility technically, but the actual effort required from me didn’t drastically increase. That being said, relationship building is a slow process. It takes consistent performance and build up of trust that you’re a reliable person to work with. I’ve built a professional network over the years and all the junior engineers I worked with at the start of my career are now being promoted to directors, VP’s, etc.

Income via other sources

For most of us, theres a cap on the employer source. 99% of people working for a company will never make over $500k a year, but there are individuals making millions a year. To achieve this level of income, the entrepreneur route or building assets that generate income for you is the easier and more probable way to increase your annual income.

Starting a company is daunting and not for everyone, but the good thing is that’s not the only way to increase your income. There’s plenty of material about creating a business, creating ideas, etc., but as I haven’t done this myself I’m not going to write about it, because I don’t have any firsthand experience with creating a business from scratch.

So what to do? Tons of investment opportunities exist, which comes back to the networking and building relationships piece above. If you’re only ever surrounded by buddies drinking beers on the weekends, odds are your not talking about investment opportunities, but we should be! For some opportunities you need to be an accredited investor, which can create a barrier for entry.

Accredited investor qualifications as of 2022 per the SEC:

1. Income Test:
   • Have an annual income of at least $200,000 (or $300,000 for joint income) for the past two consecutive years with the expectation of maintaining the same level of income in the current year.
2. Net Worth Test:
   • Have a net worth (individually or jointly with a spouse) exceeding $1 million, excluding the value of their primary residence.
3. Professional Designations, Certifications, or Licenses:
   • Hold certain professional certifications, designations, or licenses that demonstrate their knowledge and experience in financial and business matters. This may include Series 7, Series 65, or Series 82 licenses.
4. Entity Status:
   • Certain entities, such as banks, insurance companies, registered investment companies, and employee benefit plans with assets over $5 million, are considered accredited investors.
5. Spousal Equivalents:
   • Individuals may include spousal equivalents when calculating joint income and joint net worth.

This can take a while to build to, but the options it opens are huge. Some of these options are risky, which is why I personally keep most of my assets in common sources like the stock market, but because of the above I also now own a share of over 30 rental properties and am looking at commercial property developments.

Here’s some other ways to increase that income block and change the equation to your benefit!

1. Real Estate Investment (REI):
   • Rental Properties: Purchasing residential or commercial properties and renting them out can provide a steady stream of rental income. The key is to carefully research locations, understand the local rental market, and manage properties efficiently.
2. Dividend Stocks:
   • Dividend-Paying Stocks: Invest in stocks of companies that regularly pay dividends. These dividends can provide a consistent income stream. Look for companies with a history of stable dividend payments and growth.
3. Peer-to-Peer Lending:
   • Peer-to-Peer (P2P) Lending Platforms: Participate in P2P lending platforms that connect borrowers with individual lenders. By lending money to individuals or small businesses, you can earn interest income. Be aware of the associated risks and carefully vet borrowers.
4. High-Yield Savings Accounts and CDs:
   • High-Yield Savings Accounts and Certificates of Deposit (CDs): While not as lucrative as some other investments, these are low-risk options that offer interest payments. They are easily accessible and provide a safe place to park cash.
5. Dividend ETFs:
   • Exchange-Traded Funds (ETFs) that Focus on Dividend Stocks: Consider dividend-focused ETFs that hold a basket of dividend-paying stocks. This provides diversification and the potential for regular income.
6. Create and Monetize a Blog or YouTube Channel:
   • Content Creation: If you have a passion or expertise in a particular niche, consider creating a blog or YouTube channel. Over time, you may generate income through advertising, sponsorships, and affiliate marketing.
7. Create an Online Course:
   • Online Courses: Share your knowledge by creating and selling online courses. Platforms like Udemy and Teachable allow you to monetize your expertise and generate passive income.
8. Investing in Bonds:
   • Government or Corporate Bonds: Bonds pay periodic interest to bondholders, providing a fixed income. Government bonds and investment-grade corporate bonds are generally considered lower risk compared to some other investments.
9. Automated Micro-Investing:
   • Micro-Investment Apps: Utilize micro-investment apps that automatically invest your spare change. While the returns may be modest, it’s a simple way to start investing with minimal effort.
10. Dividend Reinvestment Plans (DRIPs):
    • DRIPs: Many dividend-paying stocks offer DRIPs, which allow you to reinvest dividends to purchase additional shares. Over time, this can accelerate the growth of your investment.

Happy wealth building! What are some strategies that are working for you?