Becoming wealthy is a dream for just about everyone.
Owning a nice house, driving the car of your dreams, and not having to worry about your finances sounds like that dream for most Americas, including myself.
And it's completely possible!
With the median net worth of American's between 35 and 44 being less than $100,000 – the truth is that you're going to have to be different than the average person if you want to become wealthy this quickly.
In this post, I'll explore the best ways to become wealthy in 5 years, some tips to help you build wealth, and much more. Let's get started!
- Invest your money in appreciating assets like real estate, the stock market, and other assets
- Maintain a healthy relationship with money and avoid over spending
- Work to increase your income by finding a higher paying job, asking for a raise, or starting a side hustle
- Be patient!
Best Ways to Become Wealthy in 5 Years or Less
1. Invest in Rental Properties
One of the best ways to become wealthy is by investing your money in income producing assets like real estate.
Real estate is a proven way to make passive income, and believe it or not, you don't need a fortune to get started with some methods.
By using a platform like Arrived, you can invest in rental properties across the country with just $100!
It works by pooling money together from many different investors to fund the property and you'll earn your share of the profits. I love this platform because you an choose exactly which properties to invest in. This gives you more control of your money, which I'm all for.
If you have more money to invest, you might want to consider investing in your own rental property.
In order to do this, you'll need to have 20% set aside for a down payment on the home if you plan to finance it.
There are many tax benefits of owning a rental property that can help to offset your income and make it a very lucrative venture.
Now, owning a rental property comes with much more work and headache than using a platform like Arrived, but you can make more money if you do it correctly.
Rental Property Investing
Here's a great example of a rental property in my area. The owner likely purchased the home for under $250,000 and it's renting for just under $2,000. In an area with historically high appreciation – this can be a decent investment that's worth your time.
Ultimately, you'll want to looks at the pros and cons of investing in a rental property before deciding which is best for you.
The video below can be extremely helpful so you can understand the risks of real estate investing.
2. Build Wealth Investing in Index Funds
Becoming wealthy and reaching financial freedom might sound impossible, but with index funds you can easily invest to grow your income.
You don't need a fortune to get started, either.
With platforms like Acorns you can start investing in the stock market with as little as $10. As a bonus, you'll get $10 completely free to invest when using the link below!
It's possible to become a millionaire with index fund investing BUT you have to give your investments time to grow.
The average returns for index funds range from 7% to 10% annually. It's important to remember that this is an average return. Some years you might see gains of over 15% while other years you might lose money.
Take a look at the historic returns of the S&P 500 since its inception below.
By taking advantage of compound interest you can begin to build wealth after just a few years, but it really starts to pick up steam after 5 to 10 years.
For example, if you were to invest $10,000 over 5 years with an 8% return on investment, your returns would amount to $4,693.
While that might not seem like a significant amount of money, it will continue to grow exponentially each year.
If you're looking for an easy way to become wealthy in a few years – investing in the stock market with a platform like Acorns is a no-brainer that I highly recommend.
3. Start a Profitable Business
If you're looking for the fastest way to build wealth, starting a business is your best bet.
While not everyone is cut out to become an entrepreneur, it's a great way for individuals who are passionate about their work to make money.
Whenever you think about starting a business, you might be thinking you need the next big idea or an extremely large business. But this couldn't be further from the case.
There are many small businesses that you can start that are capable of making over $10k a month.
For example, starting a pressure washing business might cost a few thousand dollars to start but it can make over 6-figures annually from your services.
The best part about owning a business is that in addition to the money you can make from your operations, you also make money in the equity you build if you can sell your business later.
For example, check out this business for sale in my area. It's being sold for $1.2 million for making $245,000 a year!
If you don't have enough money to start a business, you could recruit business partner or investors to help fund your ventures – but this will eat into your profits.
Starting and growing a company requires a unique and diverse skillset. You'll need to understand everything from marketing to operations and finance if you want to grow your business and reach your financial goals.
There's no doubt that many rich people have started a business at some point in their careers. Many of the ultra-wealthy individuals have grown 7-figure businesses that produce income and cash flow.
4. Get Rich from Blogging
Starting an online business like a blog can be a tremendous opportunity to generate passive income and quit your day job.
It can take a large amount of work upfront to get started but will become more passive over time.
If you're thinking you need to be an expert writer to start blogging, think again. In fact, most bloggers don't have a background in writing at all. It helps more to be an expert at the topic you're covering and less about writing.
Starting a blog is extremely simple and anyone can do it.
To get started, you'll first need to decide on what topic you will write about. This can be anything ranging from food to cars or even movies. Basically, you want to pick a topic that you love. After all, this is going to be what you write about!
For example, my personal finance blog explores everything from making money to investing and more.
Once you've decided what topics your blog will cover, you'll need to secure a domain name. You'll want your domain to represent the topic of your blog. My favorite platform for finding a domain name is Namecheap. They're the most affordable option that I've found.
Once you've landed on a domain name, you'll need to purchase web hosting for you to store your files online. My favorite hosting platform is SiteGround. They offer the best customer service and extremely fast services to get your blog off the ground.
Next, you'll want to install a CMS like WordPress on your site. WordPress is completely free and a simple way to manage the content on your blog.
Finally, it's time to start planning and creating content. Most people fail to spend a enough time creating high-quality content which can make if difficult to grow your traffic and revenue.
Once you have content published, your job is not over! You'll need to market your blog to grow your readership and start making money.
There are several ways to grow your blog but my favorite is SEO or search engine optimization. With this strategy, you can rank your posts on Google and other search engines to grow your traffic and make money.
You can also utilize social media and email marketing to grow your traffic but these can be more difficult to do at scale.
Every piece of content you publish that is intended to rank on search engines will begin to grow your traffic exponentially. This can produce steady cash flow and passive income for your finances.
For example, take a look at my earnings from my portfolio of sites. You can see how it increases rapidly towards the end of the year.
So, how do you make money from blogging?
Blogs make money through a variety of methods but some of the most popular include display advertising, affiliate marketing, sponsored posts, and more.
Some blogs can make over 6-figures each month. Talk about a serious income!
Blogging can be a realistic path to become wealthy in 5 years if you dedicate the time and effort to growing your site.
5. Invest in Cryptocurrency to Make Money
Investing in cryptocurrency can be a lucrative way to make money for the average person. But there's one caveat. Investing in crypto can be extremely risky. It's common to see swings of crypto prices of anywhere from 5% to over 15% daily.
With this in mind, you should never invest more than you can afford to lose.
Some investors have made tens of millions of dollars by investing in Bitcoin and other cryptocurrencies, and it's common for financial advisors to recommend holding a small portion of your portfolio in digital assets.
My favorite platform is Binance. You can buy and sell all of the most popular cryptocurrencies including Bitcoin, Ethereum, and many more. Register below to get started!
6. Invest in Commercial Real Estate
Commercial real estate can be a lucrative way to grow your money and make passive income.
There are a few benefits of commercial real estate investing over residential properties that you'll want to consider. For example, one of the biggest benefits is the longer lease agreements that can add stability to your portfolio.
Additionally, most commercial properties have a vested interest in keeping the property nice so they can attract new customers and clients. This means your property is more likely to appreciate than others.
If you're ready to get started, you can use a platform like Realty Mogul to invest in commercial properties with $5,000. The returns can exceed 9% – which is a solid return on your money.
Ultimately, having a diverse portfolio of real estate assets is the way to go to get optimal returns on your money so I highly recommend checking out both Realty Mogul and Arrived.
7. Invest in Yourself to Become a Millionaire
Investing in yourself is one of the best ways to increase your future income and make more money.
But what exactly is it?
Investing in yourself can take many forms. For example, you can invest in your future by going back to school to get additional training for your career or increase your skill set.
There are both free and paid ways to invest in yourself. For example, you can find many free online courses that teach specific skills. You could also attend college to further your education.
SkillShare offers many different courses so you can learn new skills online from anywhere with an internet connection. You can check them out below!
Tips to Building Long-Term Wealth in 5 Years
Start an Emergency Fund
Having an emergency fund is a great way to cover any unexpected expenses that might arise. Putting money into a savings account to save for these expenses is critical if you want to become wealthy. Otherwise, you might be forced to rely on credit to pay bills which can spiral out of control quickly.
It's wise to save around 6 months of your normal expenses for your rainy day fund that should be used for things like a car repair, hospital bill, or job loss.
Pay Off High-Interest Debts
Most people have some kind of debt. Whether it's a mortgage, student loans, or credit card debt, it can feel a bit hard to become wealthy with these monthly payments.
If you want to become a millionaire, paying down high-interest debts like credit card debt, personal loans, and some student loans can be wise.
Keep Your Spending Under Control
Reducing unnecessary spending is a great way to expedite your journey to becoming wealthy.
If you have a wealthy mentor, they can probably tell you all about this. Once you boost your median income it can be easy to fall in the trap of lifestyle creep.
Purchasing a new car, a new home, or other expenses can wreak havoc on your financial goals.
Be Patient
Life moves fast, but being patient is one of the most important characteristics if you want to get rich.
Financial planning is important. If you have a wealthy mentor or wealthy friends you can ask them to help you plan your finances.
Network with Others
There's no denying that surrounding yourself with other wealthy people can rub off on your own finances.
If you have wealthy friends they can be great assets to help you stay in tune with your money.
Try to find networking groups or a wealthy mentor to help you make more money.
Create Multiple Income Streams
Having other streams of income outside of your normal full-time job is a great way to boost your pay and make more money.
Starting a side hustle is an easy way to increase your monthly cash flow in your spare time.
There are thousands of potential side hustles to make money. From creating a YouTube channel to taking online surveys – making money can be a simple process taking less than 30 minutes.
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Final Thoughts on How to Become Wealthy in 5 Years
Learning how to become wealthy in 5 years is easier than you might think. That said, it can take a lot of planning and hard work to reach your financial goals.
Between investing in real estate with Arrived, starting a business, or starting a side hustle – there are plenty of methods to increase your income so you can get rich and live the life of your dreams.
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