Published by
January 22, 2024

Investing to Build Wealth

If you have big financial plans, an annual 3% pay raise is not going to get you there. The realization that a salary alone is never going to create the kind of wealth you hope to achieve is a scary one, but it's a concept that those who know how to build wealth understand. You have to invest if you want to build wealth.  A salary, even a large one, is just not going to cut it. But your salary is your way in. Learning to leverage your salary is the first step in your investing journey. Our tips below will get you on the right track to start making your money work for you.

Start early - The earlier you start, the more time your money will have to grow. With more time on your side, you also need to invest less than someone who's starting later in life. But for those of you who didn't start early - it's not too late. You've probably heard the Chinese proverb "The best time to plant a tree was 20 years ago. The second best time is now." The point is to get started now and don't wait any longer.

Create a budget - You won't fully realize the amount you can start investing unless you know how much money you spend and what you spend it on. A budget will show you where you overspend and help you figure out how much you can reasonably invest. Remember, it's important to revisit your budget and reassess periodically to make sure it's still in alignment with your goals.

Pay off high interest debt - There are very few investment vehicles that will offer returns higher than the interest you're paying each month on credit card debt. Paying off your high interest debt (7% or higher) first is a better return on your money.

Diversify your investments - This one is so important. While there is much to be said for retirement accounts, to really grow your money, diversifying the types of assets you invest in is crucial. We've all heard not to put all our eggs in one basket! Multifamily real estate is a great way to diversify your investment portfolio. Historically, it offers higher returns than the stock market, is more resilient during recessions, and has the added bonuses of cash flow and tax benefits.

Stay the course - Remember that investing is a long-term game. Stay on track and don't get too distracted by short-term fluctuations. Time in the game is key.

Reaching financial goals can feel daunting, especially when they're so far off from your current financial situation. Even with a modest salary, you can put yourself on the path to the financial future that you desire. Investing takes time and intention, but anyone can get started by leveraging their salary, and aligning how they spend their money with the financial future that they desire.

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