I enjoy watching Personal Finance and Financial Independence videos on YouTube. In one of those videos, I came across a comment that said something like this: “Are there tips for people who want to work a regular job and build wealth? Some of us do not want to create a business.” That comment is the inspiration of this article. So I will tell you how to become wealthy from a regular job.
Take Advantage Of Your Employer’s Retirement Account As Soon As Possible
Many employees have access to a 401(k), 403(b), a state, or a federal retirement plan. Many of these plans also have an employer match. Meaning for every dollar you invest into the account, your employer will invest some money too (up to a certain percentage or fixed amount).
To build wealth this way, you need to invest a specific portion of your paycheck in this account as early as you can. This allows compound interest to grow your money over time. To see that in action, view this compound interest calculator.
How much you put into your retirement account depends on your situation. You may have debt (which you should pay off), or have a family to support. I suggest you invest at least 10% of your paycheck as that’s what I do. However, if you can only allocate 5% that’s better than nothing. In that case I suggest bumping of your allocation 1% each year. And some retirement accounts have that option built into their system. All you have to do is opt into it.
Become Wealthy From A Regular Job By Choosing A Lucrative Profession
One of the easiest ways to become wealthy from a regular job is to pick a lucrative profession, especially one that pays over $100,000 a year. By earning a large salary you can allocate more money into retirements accounts.
A great way to discover such high-paying professions is to look at job boards like Indeed or Monster, or the U.S. Bureau of Labor Statistics. The latter allows you to view wages by occupation and by area.
Now even if you do pick a good-paying career, you must keep lifestyle inflation in check if you want to build wealth. Many lucrative professions requires individuals to live in high cost of living areas and it’s very easy to spend a good amount that salary on rent/mortgage, entertainment, food, etc.
What if you don’t want to change careers or move to an expensive city? Can you still build wealth? Yes you can!
Become Wealthy From A Regular Job Through Budgeting
If you are working a regular job making $35,000 to $50,000 a year gross, you can build wealth although it will take longer and will require more sacrifice and discipline.
The woman from this Money article is doing just that even though she only makes a $30,000 salary and gets $5000 in child support a year. Even though she makes a low-income, this woman is able to invest 10% of her salary into two different retirement accounts. On top of that, she’s saving for her daughter’s college fund and owns a house with a small mortgage!
She is able to do all of this with strict budgeting. You will have to do the same too. Every dollar you make must be devoted to a specific category. Use a budget tracking app like Mint or Personal Capital for support.
Realize Building Wealth Takes Time
There is nothing wrong with working a regular job. I don’t like how some Personal Finance bloggers or the Financial Independence community looks down on those who do not choose to open their own business or invest in real estate to develop wealth quickly. They don’t understand that some people aren’t built for that type of risk, while others just want to work for someone else. At the end of the day, you must choose the path that’s right for you. But no matter the path you take building wealth takes time.
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