3 Steps to Start Building Wealth

fingers walking up money

You know the saying “it takes money to make money?”

It really sums up the core concept of building wealth: positioning and using your money today to grow and multiply over time.

The good news is, you don’t need to earn six figures to start building your wealth. Anyone can do it, but you do need a plan, and to live according to that plan.

You may not be rich now, but that doesn’t mean you can’t enjoy a rich life while working towards that goal.

There are three main categories to building wealth:

  1. Save Your Money
  2. Make More Money
  3. Invest Your Money

In this article, we’ll explain how to apply these strategies in your daily life. 

1. Save Money

It doesn’t take much money to live a good life. What matters is how you use it, and the first step is to start saving money.

A wealthy man once gave this advice to his apprentice:

“Money isn’t making that much difference in how you and I live. We’re both going down to the cafeteria for lunch and working every day and having a good time. So don’t worry about money, because it won’t make much difference in how you live.”

Who was that apprentice? None other than Warren Buffett, who’s one of the wealthiest people of all time. If you’ve read his biography, The Snowball: Warren Buffett and the Business of Life, you’ll see that he is also one of the most frugal people of all time.

Saving money was his first secret of success. He understood that by living a simple life now, and only spending money on things with a lasting benefit, he could use the money he saved to further increase his wealth and net worth.

It’s as simple as that. Never spend more than you earn.

Yes, we do need to spend money to survive. But ask yourself “Am I spending money on the right things?”

Do you need that $600 a month car payment, or does it just make you worry more about being able to afford it, and not being able to do other things you enjoy?

Do those designer clothes make you happy, or do they just make a hole in your wallet that could be put to more constructive and profitable use?

You can live a happier and quality life by living within your means today, which in turn will free up your finances and start building your future wealth.

Make a budget. Track your spending, and eliminate things you can live without.

You don’t have to cut out everything and live like a hermit. Balance is a key to success.

It’s also important to plan and have a separate savings account set aside for emergencies or just some “me” time.

We never know when a hardship will come, or unexpected expenses may occur. Things can get tough. Or you might just say it’s time for a much needed vacation.

Having that buffer in a savings account will allow you to pay for those expenses, or take a needed vacation, while still staying on track towards wealth building. It gives you peace and that quality of life by helping you do what you want.

For more money saving tips, we have a lot of great ideas here.

2. Make Money

The biggest mistake people make when it comes to making money is relying on a single income stream.

A lot of us have a job, and it’s the only source of income we have, but there’s no reason why 100% of the money we earn has to come from our employer.

You know the idiom “Don’t put all your eggs in one basket.” 

It’s great to know we have a weekly or monthly paycheck coming, but what about the rest of the time when we’re not at our regular job? When is the next time you’ll get a raise? What happens if the economy goes south?

Relying on income from just your job limits your earning potential.

To build your wealth faster, you need to generate more money. 

Easier said than done? You probably have more opportunities than you think.

Sell something online. Have a yard sale. Rent out your home or apartment on Airbnb on days you’ll be away, or crash at your parents or friends house on those days. Use your skills or talents to teach a class or give lessons. Babysit, do yard work, write about things you love with an online blog. Or just take simple surveys for money during your down time when watching tv. 

Do what it takes.

This article can get you started with making money on the side.

You need income. Once you’ve started saving money, and making extra income, building your wealth will take care of itself in step 3.

3. Invest Money

What is the purpose of investing? 

It’s about making money, sure, but it’s more about building wealth. 

It’s not about the short term, but continued growth in the long term and securing your financial future.

Making money trading individual stocks can be intimidating, difficult, and risky. I’ve been there. Plus, when owning stocks of an individual company, I can’t stop myself from watching the performance on a daily basis, and often multiple times a day.

It’s a bad habit, added stress, and time that could be spent doing something more productive or enjoyable.

Picking stocks often feels like a game of chance. People like you and I hardly ever make money with stock trading. The truth is, most professionals don’t either. In fact, 95% of professional stock managers can’t even beat the market.

I don’t like leaving my finances up to luck. 

So what can we do?

By investing in index funds, you can basically eliminate that feeling of chance and constantly checking stock prices.

Index funds are essentially a diversified portfolio of a whole group of companies, bonds, and local or foreign currency. They are low risk, and you don’t have to worry about a single company losing money or going bust, because if it’s not performing, it will just get replaced by another company. 

I recommend reading The Little Book Of Common Sense Investing by Jack Bogle, to learn more about index funds and how to get the best rate of return on your investment.

Index funds more closely follow the average stock market return, which over the long term is about 10% annually.

This 10% average rate of return may not sound like a lot, but it’s calculated with compound interest, which you can think of as “interest earned on top of interest.” It’s a magical thing.

For a simple example, if you invested $1,000 a year for 10 years, with an average rate of return of 10%, then your total $10,000 investment is now worth $18,531. That’s 168% of your initial investment!

You can use our compound interest calculator to see just how quickly your investment can grow.


Building wealth is not a get rich scheme, and it doesn’t happen overnight.

But it is something that you can achieve with proper planning, no matter what stage of life you’re at. 

You have the power to take the steps (saving, making, investing) needed to secure your financial future!

You can do this!

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