How does someone actually get rich?
Should they make more money at their jobs by working harder?
Should they take on longer hours and more responsibility … all in vain hopes of getting a better raise or bigger bonus?
Is your job even really the only way how to become independently wealthy?
In this post I want to dig a little deeper into what it takes to actually become “rich”.
People who have made it – whether they are in the top 100 of Forbes or even people that you know in real life – more than likely didn’t get there by running the rat race and working themselves to death.
While that might be the case for a small fraction of individuals, I think you can find in just about any good book or biography that the successful and wealthy got to where they are by recognizing one thing …
… that there was a better way than to simply live for your paycheck!
Who Are You Actually Working For?
Don’t get me wrong. Hard work is very honorable. Without persistence and grit, I don’t think that most of us would be where we are today.
Is a job necessarily a bad thing? Does everyone have to be a self-made entrepreneur? Absolutely not! If you’ve got a job, do it and do it well. That’s what’s expected when someone is paying you for a service.
However the thing I want you to remember is that there should be a balance. If you provide a good service, then you should be compensated for it.
For example – how often is your hard work exploited? How many extra hours do you put in at the office or home? Are you making your employer thousands or even millions of dollars each year, but then when it comes time to get your raise or bonus you receive nothing or something short of your fair-share?
Now ask yourself the hard question: If things continue the way they are, how far is this career of yours really going to go? Are you going to work really hard for 10 or 15 years only to be promoted to middle management and have your salary capped at the average market rate?
Do the math. At this rate are you ever going to be financially free by the time you want to? Is this actually the way how to become independently wealthy? If your goal is to become a millionaire, is that EVER really going to happen?
The problem with relying only on trading labor for money is that it completely limits your earning potential. If you earn $60,000 per year at your job, then that’s all you’ll ever have for that year. You might save $5,000, $10,000, or even $15,000 each year. But still … you’re confined to a single number – a number that is unfortunately dictated by someone else.
Face it. The conventional system to create wealth is rigged.
If you ever truly want to become wealthy and still enjoy your time, you’ve got to get more creative.
How to Become Independently Wealthy for Real
Now let’s explore a different scenario:
Everyday people use the Internet to buy stuff. Think about the last 10 websites you visited. Almost all of them had ads on them, right? Some were on the top, some were on the side, and some were even in the body. Heck – you might have even been persuaded by the article to actually buy something through one of these sites.
Guess what? When people do that, someone gets rich. Who is that? The retailer of the product of course, but you know who else? The person who owns the website.
I discovered this fact years ago, and I wanted in! I read about regular people like you and I who were setting up these small niche websites and making thousands of dollars per month from doing so. I studied their methods and went to work on it for myself and my family.
So what happens now? Every day over 1,000 different search phrases within Google brings traffic to my websites. Once they get there some of the readers click my ads and buy products. I get rich! Read through my niche website updates and you’ll see that sometimes I make over $1,000 per month by doing this. It happens while I’m at work. It happens while I’m asleep.
By creating an online business, I went from being the employee to being the owner. I created a situation where virtually all the money I make goes directly to me. Depending on how well I manage the business, there is no limit to how large I can grow things. By being the owner I’ve released the shackles of my earning potential.
Another Method – Putting Companies to Work for You
Building websites may not be your thing. But owning a business doesn’t mean you have to start one from the ground up.
Consider this other classic money making strategy: Stocks.
When Steve Jobs was alive, I owned shares of Apple. Why? Because it was worth the price of the stock to have a guy like Steve Jobs work for me! And when I sold my shares for almost double what they were worth, I’d say it was well worth it
Lots of people think that stocks are complicated. But few of them realize that you honestly don’t have to know anything about the stock market to do well. The magic when it comes to investing is in knowing just a few key things:
- How powerful compound interest is.
- How your taxes work.
Compound interest. With nothing more than a few thousand dollars and a lot of time your hands, it is completely possible to turn your savings into over a million dollars. By investing in the market average you could take advantage of an annualized 8% growth rate. Check out these examples here to see how quickly your money could grow.
Could you imagine getting your savings all the way up to $1,000,000 and having the stock market grow by another 10% that year? That would be an extra $100,000 for you – all because you’re the owner of that money. Ultimately the goal of anyone who is independently wealthy is get their assets to a point where the money they make from them is enough to live off of them.
Taxes. If you understand how to avoid paying taxes on things that you don’t have to, then you’re in for saving a boat load of money. In fact if you’re really creative, you could end up having a completely tax-free retirement (just like I lay out in the post linked here).
By using these assets to my advantage, again – I’m the owner. I reap the benefits. No employer can ever take this away or decrease the amount of earnings or dividends I will receive from these investments. They are mine to keep, and that gives me all kinds of confidence and security to not let anyone take advantage of who I am and where I want to be.
Opportunities for More Income Are Out There:
What else could you be doing outside of your job to grow your top line?
- Could you start a website? If you already own one could you grow it bigger or start another?
- Could you be a better investor or look for other ways to buy assets tax-free?
- Could you own a rental property?
- Could you own another type of business?
- Could you try one of these other awesome second income ideas?
Don’t back yourself into a corner and hand-cuff yourself to a single paycheck. You don’t have to limit yourself to one source of income. If you’re making excuses, then all you’re doing is being your worst enemy.
Find the opportunities for how to become independently wealthy and seize them. Seek. Focus. Try and try again. Don’t give up until you conquer. Bring money to your household that you never thought you could receive. The better you’re able to automate this, the more your money will finally work for you for a change!
Readers – What are you doing outside your job to build your wealth? How are you automating your income?
Featured image courtesy of Pexels
How To Save Money says
I’m also in the field of creating websites and blogging. Cheers to our financial freedom!
It’s only a matter of time!
Shannon @ Financially Blonde says
I have a client I have been working with for the past year that I have urged to invest more rather than leave her assets in cash. She is very risk averse; however, over the past year, I have gotten her to budge more and more. Finally during our meeting last week when she saw how much income she was making off of her investment portfolio, she admitted that I was right and she would invest more. Sometimes you just have to do it to become a believer and you have to do it for a little while, but over time, it’s a very compelling argument.
That’s great you were able to help her come around. You picked a good year to get her involved!
Some people are just so risk adverse or fearful that the investing will be complicated that the whole thing just shuts them down. But then once you go through the long-term predictions or can show them what they’ve actually earned they get hooked.
Myles Money says
Wealthy or rich is also dictated by how you spend, not just by how you earn. I know people who earn a lot of money but they’re not rich because they spend ridiculous amounts of cash on shiny toys, expensive holidays & new cars (all for show) they have a huge mortgage on the house they rarely spend much time living in because they’re so busy working they don’t have time to live in it. As a result, they are every bit as much of a wage slave as the next guy. Being rich is about being able to choose when to quit work — living life on your own terms, not those of your boss.
I couldn’t agree with you more. The point at where your assets or other income streams can (or do) completely replace your employment income needs, then you’ve reached true financial independence.
Passive income is the key to real wealth. Do you think Mitt Romney does much work these days?
It’s funny you bring that up. I just did a guest post on a different blog where I mentioned Mitt’s income streams:
Capital gains ($6.8 million)
Taxable interest ($3 million)
Dividends ($3.7 million)
I think I’d be pretty satisfied with those income streams 🙂
Donny @ Personalincome says
When thinking of wealth, I always think about how I can find more ways to increase my current monthly cash flow. The more cash I have coming in, the more I will be able to save and re-invest back into my business.
I’m all about that as well. The more I can increase my extra income streams, the more I’ll have to either put back into my website portfolio or simply invest in my dividend stock pool.
Jayson @ Monster Piggy Bank says
I am actually learning how to make websites! I have enrolled in some classes and tried to build some websites. There are really more to learn, but I am on my way. This is surely a way to becoming independently wealthy!
Good for you Jayson! I think you’ll find online income to be one of the more lucrative and profitable ways to earn money on the side.
if you want to make niche websites don’t waste your time writing them yourself. i know how it feels to want to do everything yourself but you could start making money much sooner if you use the resources that are already there, such as wordpress.
True. It all depends on who and what you use. I’ve worked with wonderful freelancers that were able to greatly help me accelerate my article writing, posting, and promotion. But then there are some services that are an absolute waste of money. Like anything else, you have to try it out and stick with the people that you work well with.
I need to get better at website portion, I think I would benefit from knowing design and at least a lit bit of search engine optimization. Being this is currently more hobby related with more of a long term goal, I haven’t focused on this yet… but it doesn’t mean it should be ignored!
Great tips btw, niche sites sound interesting, people research all sorts of products all the time so if you can be a great source of information and have affiliate links to multiple sellers of the product for different needs, it makes sense that your site would generate traffic (and revenue).
If you haven’t tried it yet, I’d recommend building a niche site (or even a second site). The fun thing about having more than one website is you get to experiment and try different things that you wouldn’t normally do with your primary website. As you can guess its this experimenting that has helped shaped my understanding of SEO and ultimately making money online.
Kayla @ Femme Frugality says
Outside of my FT job, I work at a PT job, I own a direct selling “home business”, and I’ve started freelancing. By combining these outside income sources, I’m able to do more fun things and also work toward my financial goals more quickly.
That sounds busy! 🙂
Hey there, MMD, I just want to start off by saying that even though this is my first comment, I’ve been following your blog for awhile. This is the place that I first heard of the concept of “passive income”, and it’s been something I’ve been working towards since. So I want to say thanks for the inspiration.
Now I’ve been doing quite well with dividend growth investing, but I want to try my hand at online methods of making money (I can’t only make passive income through investing; I’m not made of money). I tried to design a website once, but failed miserably (it was too complicated for me, and my idea for a site was so complicated that HostGator refused to actually make it for me, even though they offer that service). A lot of my attempts and projects fall under the “I should have known this would be too complicated/technical for me” category. But I’m willing to give it another shot.
I’m hoping to design a WordPress-themed blog similar to yours and a number of other sites I follow (such as Dividend Mantra) and make money through Adsense and affiliate marketing. But there’s the balance between a topic you’re passionate about and a topic that’s commercial, so I’m asking your honest advice. Being in retail banking for almost a decade, I have a lot to say about the topic (mostly negative. I hate it). Do you think a(n anonymous) blog detailing my grievances with banking and customer service in general, along with tips for customers on how to best protect/maximize their money as well as my own opinions on what banks should do, could possibly do well? I know it would take time and effort like any other blog, but I just want to know if it’s a non-commercial topic that I shouldn’t even bother approaching.
Also, do you still use and recommend iPages?
ARB would be my theoretical blog handle, by the way. Like I said, it would have to be an anonymous blog.
Thank you very much for the compliment. I’m very honored to have inspired you! About the WordPress site – I’ll send you an email.
Jason @ Islands of Investing says
Great post. Love all these ideas. This is just the sort of thing I need to focus hard on, especially now that I’ve squeezed my finances a little with the purchase of a new home. I’m pretty much convinced that rather than focus on the promotions at my current job, I should put some effort into developing these other sources of income, which should pay off much better in the long run.
Also great to see what you’re doing with your Niche sites, and the update reports you provide – will definitely start following this more closely!
Good luck with monetizing your site Jason. I’m extremely partial to building income streams outside of your job, and a blog can be a great way to make that happen. I think you’ll find a lot of good info packed inside my niche site updates. If you have any specific questions feel free to email me.
Jon @ Money Smart Guides says
I use websites, rental property and the stock market to grow my wealth. It’s amazing when I see the hard work I’ve put in to my site pay off with advertising income. It is also nice when the stock market goes up and my wealth increases as a result. You just have to remember that everything takes some effort and you won’t get rich overnight.
Well said. Investing is so incredible. For the first 10 years my portfolio seemed so small and didn’t really seem to increase by all that much. Then at some point the stock market picked up and I had some pretty major up-swings. In one year I could potentially earn $50K or so from just the gains alone. That makes it all worth while.
Real estate, real estate, real estate.
Side gigs are good.
Stock & bond cash flows are better.
But cash flow positive real estate is where you want to be in this economy. Cash is getting less valuable by the day with the federal reserve and dip protection team in full force. Best to have your money in something real that also produces an income that can vary with the value of the dollar and is less volatile than the markets.
One good rental will beat a portfolio of stocks in the coming years.
Unfortunately real estate is one area where I don’t have a lot of experience and can’t really offer a lot of opinion. However I’ve crunched the numbers in previous posts and I agree – if everything goes right the returns are quite lucrative.
My husband and I are really looking into investing in real estate but are too afraid to take the risk. Good points you mentioned here though.
Same here. I love the idea of real estate and the high potential for income. But I’ve also heard too many horror stories and don’t really know the first thing about doing it successfully. One rule I always stand by when it comes to investing is to stick to what you know.
Mohd Arif says
Undoubtedly, this is an awesome article creative by you. You really inserted some very interesting points which force us to think in details. I really enjoyed this article.
Thank you so much for sharing this awesome article with us here.
I wish you the best of luck on your blogging journey.
Have a great weekend!
Neha Singh says
What an awesome tutorial on how to become Independently wealthy outside your Job. This is surely a way to becoming independently wealthy. I will share this post with my followers, hope they will love it.
Thanks for sharing this useful post:)
Thanks for Sharing Information , My husband and I are really looking into investing in real estate but are too afraid to take the risk. Good points you mentioned here though.