How to get rich on a low income
Let’s face it, we all want to be rich one day. Whether it’s to retire early, give our loved ones everything they deserve, or just because you want status, most of us have the same goal.
However, with very few of us on 6 figure salaries, it can be difficult to know how to grow serious wealth.
Just because it is difficult doesn’t mean that it is impossible though. Here are some of my top tips to grow wealth and become rich on a low income;
Look at your expenses
The occasional Starbucks isn’t stopping you from becoming rich, but unnecessary reckless spending is.
If you are buying clothes your wear once, getting daily snacks, or ordering Deliveroo when you don’t need to… STOP!
Yes, I am well aware that everyone tells you that you need to do this. But have they told you why?
No expenses to cut?
This is a very common situation, and one that a lot of people find themselves in.
If you are in a tight spot with your current expenses, I’m afraid the only way to get rich is to grow your income.
Unfortunately, this isn’t the best fix, but it is a great way out if you have the time to look into it, here are some suggestions;
Start a side hustle/ take on a second job
Begin investing
Investing is a proven way of building wealth and with post-inflation rates of return being around 7% annually, you can understand why.
With this money that you are saving (or making) we are going to begin to invest it.
Read our free guide on investing here, and open a fee-free investing account with the likes of Freetrade* or Trading212* and start learning.
The Easy Way
The easiest way to invest is into an index fund, personally, I like the VUSA ETF (not financial advice).
This gives you exposure to the growth within the top 500 US companies at any one time.
Whatever money you are now saving or earning additionally, I would recommend that this goes into your investment account (as long as you have an emergency fund of savings at your disposal).
I don’t care if it’s £5 a month, it all adds up and can help massively.
Examples
To showcase how powerful investing can be, let's look at how much 40 years of investing can become;
£5/ month becomes £13,124
(of which £10,724 are gains)
£10/ month becomes £26,284
(of which £21,448 are gains)
£20/ month becomes £52,496
(of which £42,896 are gains)
£50/ month becomes £131,241
(of which £107,241 are gains)
…and so on!
Why does this matter?
The thing that I am trying to highlight here is that a lot of people say “you need to be rich to invest” but you really don’t.
You can see the powers of compound interest being shown in these examples.
When you realise that not having a meal deal a week could equal an extra £26k down the line, you will begin to stop subconsciously spending unnecessarily!
Getting started
It seems difficult, but the most difficult part is getting started.
I began investing with small amounts and suddenly realised how incredible a tool investing was, and I now ensure that it is my number one priority!
If you have any questions, feel free to drop us an email or a DM on Instagram.