How Can You Build Wealth in Your 30s Without Stocks or Real Estate?
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When people talk about things like investing and building wealth, stocks and real estate often enter the conversation. And I understand why. With the stock market, returns tend to be higher than they are with things like savings accounts, even high-yield savings accounts, and CDs (certificates of deposit). And when you buy real estate, you’re buying property that can become an asset for you, especially if you’re receiving rental income from the property.
But in this modern world with the wonder that is the internet, these are no longer the only ways of building wealth. I can’t say that any way is better or worse in general. But I think every person may find that certain ways of building wealth suit them, their personality, and their lifestyle better than others.
My View on Investing in Stocks and Real Estate
For me, for instance, I find the stock market to be very cold and impersonal. I don’t like the idea of investing in a bunch of stocks through things like mutual funds where I’m not aware of how each company included does business or even what the mission of each company is. And I don’t feel like taking the time to do research on all those companies.
Plus, it’s possible that in a group of stocks, there are some companies included that I don’t want to invest in because I don’t support their mission or don’t agree with the way they do business.
I haven’t yet invested in the stock market. But if I were to do it, I would only invest in companies where I believe in the mission, which means I would be investing in individual stocks not large groups all at once. And even then, I would research the history of each company’s stock performance before investing.
And I find the idea of investing in real estate to be too personal for me. I know I wouldn’t have the heart to force someone to vacate property if they couldn’t pay the rent. And I don’t feel like dealing with things like difficult tenants or the search for a good property manager.
Financial advisors and other experts might totally disagree with this mentality. They might tell me I’m making things too personal or too complicated. If they do, I don’t care. I get to build wealth the way I want to, and I choose not to rely on stocks or real estate for doing it.
The 5 Principles of Wealth-Building
The reason I understand that these types of investments aren’t necessary for wealth-building in your 30s (or at any age) is because I understand the 5 Principles of Wealth-Building. I go into them briefly here, but I’ll tell you now that these are the five principles:
Live below your means.
Save and invest.
Avoid debt and unnecessary expenses.
Increase your income.
Become financially literate.
If you apply these five principles to your life, wealth-building becomes possible for you. But for the purposes of this post, we’re going to focus mostly on the fourth principle—increasing your income.
An Alternative Way to Build Wealth in Your 30s
The way I see it, instead of building wealth through these more traditional channels, you can focus your efforts on increasing your income (principle 4) by creating multiple streams of income for yourself. (I was inspired by Bob Proctor for this method of wealth-building.)
Many of us were taught to rely on having one main source of income to meet all our needs, usually through getting a job. But this is just past conditioning resulting in limiting money beliefs and it can hinder wealth-building. Because even people who do make more traditional investments can have multiple sources of income.
The main reason for increasing your income is not so you can have more money to spend, something I learned from the book Simple Path to Wealth by E.A. Sparks. The main reason is so you have more money to save and invest. Saving and investing is where real wealth is built, which is how people on even modest salaries can build wealth for themselves. They don’t spend everything they make, and what they save and invest can grow for them.
But the more money you have to save and invest, the faster your wealth will grow.
An Example of How This Might Look
Let me give you an example. Imagine you have a job or a business where you’re making $5,000 a month after taxes. And imagine you’re using the 50/30/20 budgeting rule for managing your money. (This rule states that you spend 50% of your after-tax income on needs, 30% on wants, and 20% on saving and investing.) So, that means you’re saving and investing $1,000 every month.
For the purposes of this example, we’re going to say that you’re not even investing the money you’re putting aside. You’re just saving it and it’s not earning interest. And imagine that your wealth goal is to have one million dollars in savings.
If you’re saving only $1,000 every month, it’ll take you about 84 years to save one million dollars.
Now, imagine you have five sources of income, each of them bringing in $5,000 a month. One could be income from consulting that you’re doing. One is from sales of an ebook. One is from podcast sponsorships. One is from sales of an online course. And one is from subscriptions from a membership site you created.
(By the way, one of the great things about these particular income streams is that you can do them all at home or online, meaning you don’t have to pay for things like office space. And that means you can keep your costs low and profits high.)
With these five income streams, you’re bringing in $25,000 a month. And imagine you’re still setting aside 20% for saving, which means you’re putting aside $5,000 every month. At this rate, you’ll reach your million-dollar savings goal in about 17 years.
But here’s where things get really fun.
Imagine that you don’t need 80% of this income to live comfortably. Imagine that you’re comfortable living off only $5,000 a month, including both wants and needs. That means that you can save $20,000 every month.
At this rate, you’ll have a million dollars in savings in under 5 years.
Now, if you do invest your money in addition to saving it or if your savings are earning interest, all of this can happen faster. Even by saving and investing $1,000 every month, it’s possible to reach your million-dollar goal faster than with savings that aren’t earning interest. But this also means if you’re saving and investing $20,000 every month, you’re essentially putting a rocket on your wealth-building journey.
To do this without stocks or real estate, you can put your money in things like high-yield savings accounts and CDs and you can invest it in nontraditional ways. For example, you might have to invest some money to actually start creating these other sources of income.
You might pay someone to design your ebook for you. You might have to pay for the platform where you host your membership site or online course. You might invest in coaching to help you become a more effective consultant or podcaster, allowing you to charge more for your services or reach a wider audience.
These are all investments. So, even if you’re not investing traditionally, you can still use some of the money you’re setting aside for investing.
Your Definition of Wealth
One essential thing I need to mention is that your definition of wealth should be the only one you’re paying attention to. Maybe you don’t consider being a millionaire to be your definition of wealth. Maybe all you want is to be able to afford a certain quality of life. Or maybe you want enough to be able to stop working out of necessity.
It’s important for you to understand what being wealthy means for you before you make that one of your goals. Otherwise, you won’t know when you’ve arrived at your destination. And chasing someone else’s definition of wealth will likely leave you feeling empty. So, before you even embark on your wealth-building journey, decide what it means to you to be wealthy.
Thoughts on This Unconventional Method
I will admit that this wealth-building method is more hands-on, at least initially. Unlike with stocks, where you invest your money and then wait for it to grow or real estate where the rental income comes to you passively, you will have to be more creative and put in some upfront work to start generating these income streams.
You’ll have to take time to learn about things like marketing and sales and you’ll have to become good at them. You’ll have to learn about your customers and how to help them meet their needs in a way they’re willing to pay you for. And you’ll have to figure out what your offerings will be, which will likely involve some form of market research. All of this will take time.
I’ll also admit that this might be a better strategy for people who don’t have responsibilities like young children to care for or families to take care of. This might be a better strategy for people in their 30s who are single or who don’t yet have families and therefore have time to put in the work required to build these income streams.
But with enough experimentation, hard work, and creativity, I believe anyone who wants to can start generating multiple sources of income. And I see this as a viable strategy for building wealth. Also, you can find ways to make most or all these income streams passive or semi-passive at some point so that you have more free time to devote to other things.
So, what do you think about the concept of building wealth without stocks or real estate? Let me know in the comments.
~ Ashley C.
P.S. The reason I’ve been able to arrive at this conclusion that it’s possible to build wealth without real estate or stock investments is because I’ve done a lot of work on my money mindset. For instance, I’ve come to see the number of ways that people can make money as being unlimited.
If you feel like your money mindset could use some work or if you feel like yours is keeping you from building wealth or even believing in your ability to do so, I offer money mindset coaching services you might be interested in. Simply click here to learn more.
Note: The advice presented here is for informational purposes only. If you’re in need of professional financial advice, please see a qualified professional.