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Have you ever wondered how you can become rich? Is there a sure path to becoming rich? If there is, what exactly can you do to get rich?
Is There A Realistic Way To Become Rich?
Okay, if you are looking for secrets to become a millionaire overnight or in a few months, this is definitely NOT for you.
Here are only two known ways to become rich fast:
- Win Powerball Jackpot ( Here’s a fact – the odds of winning the Powerball jackpot are 1 in 292,201,338)
- Inherit a Large Sum of Money ( This might happen if you have rich parents or grandparents who are not going to leave all their money to charity or cats)
However, the possibility of it happening to ordinary people like you and me is close to zero.
So, it’s simply not realistic to even hope to get rich that way.
Now, what are other possible ways to become rich?
Throughout my previous career in the financial industry, I’ve met some people who are wildly successful and super rich.
Here’s their profile:
- Founder of an international brokerage firm
- Founder of a private property development group
- Founder of investment management company
- Founder of tech startup
- Founder of an education company
What do they have in common?
They all started with a very humble background (little money, no rich parents and no connections).
But, they had a good business idea and worked hard to grow and scale their company over many years. (yes, not overnight or not in a couple of years)
Compared to striking a lottery or receiving a sizable inheritance, the possibility of becoming rich through starting and growing a company is of course much higher.
But, it is not a guaranteed way to get rich.
According to US Census Bureau, almost 30% of the businesses close down within the first 5 years.
So, the odds are not looking too good if you want to choose the startup route.
Also, the capital required to start up the company and grow and scale it is not a small sum.
We are talking about business costs such as office rental, wage, equipment, utilities, insurance, tax and etc.
So, is there a realistic and guaranteed way for ordinary people like you and me to become rich?
The answer is yes.
In fact, there are many ordinary people who become a millionaire without a big fat paycheque.
Let’s look at some real-life examples.
A Vermont-based janitor and gas station attendant Ronald Read, with just a modest salary, had quietly amassed an $8 million fortune, all because of his smart investing habits and frugal lifestyle.
In his case, it took him decades to accumulate such wealth.
Todd Baldwin, a millennial in Seattle, became a millionaire when he was just 25.
Two years later, he brings in $305,000 a year, which comes from three different income sources – rental properties, his sales job and the extra money as a secret shopper.
His super-frugal lifestyle also allows him to save and invest most of his income.
So, basically there are three proven and realistic ways that you can get rich over time even if you are broke right now.
If you read until the end, you will discover a NEW way to make money with little risk but high return (yes, it’s true and legit because I’ve done it and many other people have done it).
Get Rich Strategy #1
So, how can stock market investing realistically make you rich?
The secret lies in the power of compounding.
Compounding is the process in which the investment returns are reinvested to generate additional earnings over time.
For example, if you own 1000 shares in Mcdonald’s, then you will probably receive about $1000 dollars in dividends a year.
Instead of spending it, you use the dividend income to purchase more shares in Mcdonald’s which will generate dividend income for you year after year.
The sooner you start investing, the more the “power of compounding” can work in your favor.
And that’s also how Warren Buffet became a billionaire investor.
Let’s look at a chart below.
Susan: Invest $5,000 a year between the age 25 and 35 for a total of $50,000.
Bill: Invests $5,000 a year between the age 35 and 65 for a total of $150,000
Chris: Invests $5,000 a year between the age 25 and 65 for a total of $200,000.
Now, assuming their money compounds at 8% a year (this is the average return of S&P 500), Chris would have turned his $200,000 into more than one million just by investing passively in the stock market before the age of 65.
Susan would have turned her $50,000 investment into $600,000 by the age of 65.
Bill has invested two times more than Susan in total, but he started 10 years later than her.
As a result of his delay in starting to invest, his $150,000 investment only grew to about $540,000 by the age of 65, which is less than Susan’s.
So, what’s the secret to getting rich passively and predictably?
Start investing as early as possible and stay invested for the long term to take advantage of the power of compounding.
Now, here’s a compound interest calculator that you can play with to see how much wealth you can accumulate by making small and consistent investments in the stock market over the long term.
When you are trying out the calculator, there are the numbers that you must input:
- Initial investment
- Monthly contribution
- For how many years you are planning to make a monthly contribution
- Expected rate of return on your investment (i.e interest rate)
- Compound frequency (i.e. annually if you are reinvesting your dividend income once a year)
Below is the chart that shows you how much wealth you would have accumulated if you start with zero investment but make a regular monthly contribution of $600 for 40 years, assuming your investments compound at 8% a year.
In 40 years, you will have $1,865,206.
Pretty great, right?
Now, let’s look at how realistic it is to make a regular contribution.
Let’s say that you plan to invest $600 a month or $7,200 a year.
Is that a lot of money?
In fact, this should be quite manageable for most people, especially if your employer offers a 401k plan.
Your employer will typically match your 401k contribution, dollar-for-dollar, up to a certain percentage of your salary (commonly about 6%).
Let’s say you are making $50,000 a year and your employer matches your 401k contribution up to 6% of your salary.
So, that means the maximum employer’s 401k match for you is $3,000.
This is 100% free money for you if you contribute at least $3,000 to your 401k.
What’s more, all your 401k contributions are tax free until you withdraw it at the age of 60.
So, effectively you are deferring your tax and use it to invest and grow your wealth.
Now, back to our question, is putting $7,200 a year for investment in your 401k manageable for most people?
You see, by contributing $3,000 a year to your 401k, you will have $6,000 a year after taking into account of your employer’s 401k match.
To reach $7,200, you just need to make an additional monthly contribution of $100 which is very affordable.
Now, how do you invest and grow your money in 401k?
Depending on the investment options offered by your 401k plan, you can choose to invest your money either in ETFs or mutual funds.
My recommendation is to invest in stock index ETFs which charges much lower fees compared to mutual funds and also historically performs better than most mutual funds.
So, to sum it up, investing in the stock market early and consistently over the long term is a proven path to wealth for average people.
Although the wait might be long, the good thing is everyone can do it.
How To Start Investing With Little Money In 2020
Get Rich Strategy #2
If you have read the book “Rich Dad Poor Dad”, you might know that the author Robert Kiyosaki first went broke after several of his business failed, and later went on to become a multi-millionaire through real estate investing.
Here’s his real estate investing success formula:
Buy high-quality rental property with positive cash flow and then buy more of them until the monthly passive income you receive exceed your monthly living expenses and more.
For a rental property to be considered a good investment, the monthly rental income you receive from the property must at least cover, if not exceed, all your monthly expenses.
If your rental income exceeds all your monthly expenses, then you will have a positive cash flow every month.
The higher the positive cash flow, the better it is.
For example, let’s say you bought a rental property with a monthly rental income of $1700 per month.
Assume that your mortgage is $800 per month while your tax is $160 per month and other property-related expenses (i.e. insurance, maintenance and etc) are $500 per month, you will have a positive monthly cash flow of $260.
That’s $260 free cash in your pocket every month while someone else is paying off your property for you.
In other words, you are getting paid to own a property for FREE.
Now, imagine that you own 10 such properties.
Then, that’s $2600 in monthly passive income which is pretty good for most people.
If you can scale it up to 20 (or even 50) properties, it would be $5200 (or even $13,000) in pure passive income every month.
Let’s not forget you are also profiting from the principal repayment that your tenant helps you make every month.
The NEW Way To Accumulate Wealth
Whether it’s stock market investing or real estate investing, it’s a proven way to grow your wealth.
BUT, it requires a lot of money to do that.
Also, you are taking a lot of risks as we all know investing comes with risk.
From the examples mentioned above, to accumulate close to 2 million dollars by the age of 65, you would need to invest in the stock market a total of about $350,000 over 40 years.
That’s a lot of money you have to commit to stock investing.
In the case of real estate investing, there is also the risk of not being able to find tenants for a prolonged period of time.
This risk is real because my husband and I couldn’t find a tenant for our rental property for slightly more than 3 months.
And if your property stays vacant, you will have to come up with cash to make the mortgage payment yourself.
So, these are risks that you have to keep in mind.
Now, is there a way to make money with little capital but high income potential?
The good news is that there are low-risk high-return money-making opportunities.
And I call it “Digital Assets“.
So, what are digital assets?
Have you watched this YouTube Channel called “Perfect Dude”?
Five friends in their 30s—Coby Cotton, Cory Cotton, Garret Hilbert, Cody Jones and Tyler Toney— started this channel and have been uploading videos of them playing sports, performing stunts and breaking Guinness World Records ever since.
So, how much did they make in 2019?
20 million! (and no, I didn’t type it wrongly).
Digital assets: YouTube videos
Monetization: Ads revenue, sponsorship, affiliate sales, own product or services
Capital required: almost zero
Now, let’s look at another type of digital asset.
If you are into cooking, you might have heard of this food blog called ” A Pinch of Yum”.
This blog was started by Lindsay Ostrom.
She cooks delicious food, takes photos of them, and writes recipes on this blog.
So, how much does she earn from her food blog?
About six-figure per month ( or at least a million dollars a year )!
Digital assets: Blog/Websites
Monetization: Ads revenue, sponsorship, affiliate sales, own products/services
Capital Required: Less than $50 a year for beginners
Wanna find out how YOU can build your own digital assets and turn it into a new stream of income for you for long?
In this FREE email course, I will share with you EXACTLY what I did to take my blog from zero to a full-time income in less than 6 months!
To start a website/blog, you need to purchase a domain name and also web hosting.
For my own blog (this one that you are reading right now), I used Bluehost Web Hosting. ( it comes with FREE domain name)
Below are two web hosting plans that I recommend:
Bluehost is slightly more expensive because it offers FREE domain name and also FREE SSL for your websites while NameCheap will charge you for both separately.
Personally, I recommend that you start building digital assets that can generate income for you for life.