The Personal Finance Podcast - How to Build Wealth on a Low Salary

Episode Date: January 19, 2026

Join the Free Master Your Money Workshop Join the community built to help you master your money, stay accountable, and reach financial freedom. 👉 Join Master Money Academy today! In this episode of The Personal Finance Podcast, Andrew reveals how to build multi-millionaire wealth on a low salary, sharing stories of janitors and secretaries who built $7-70 million fortunes through discipline, breaking down the step-by-step system including capturing employer match, eliminating debt, establishing a 20-30% savings rate, investing in index funds, and maintaining consistency over decades to reach $2-4 million on modest income. Listen to The Business Show here. Join The Master Money Newsletter where you will become smarter with your money in 5 minutes or less per week Here! Partner Deals Go to http://acorns.com/pfp and start automating your investments and get a $5 bonus today! Get 50% Off Monarch, the all-in-one financial tool at www.monarch.com/PFP Join the loyalty program for renters at joinbilt.com/PFP  Go to http://policygenius.com to get your free life insurance quote. Indeed: Start hiring NOW with a SEVENTY-FIVE DOLLAR SPONSORED JOB CREDIT to upgrade your job post at http://Indeed.com/personalfinance Thanks to Fundrise for Sponsoring the show! Invest in real estate going to http://fundrise.com/pfp   DeleteMe: Go to https://joindeleteme.com/PFP20/ and Use Promo Code PFP for 20% off!   Resources Mentioned: Finally, Get That Raise Connect With Andrew on Social Media: Instagram TikTok Twitter Master Money Website Master Money Youtube Channel Learn more about your ad choices. Visit megaphone.fm/adchoices

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Learn more at tellus.com slash online security. No one can prevent all cybercrime or identity theft. Conditions apply. On this episode of the personal finance podcast, how to build wealth on a low salary. What's up, everybody, and welcome to the personal finance podcast. I'm your host, Andrew, founder of mastermoney.com. And today on the personal finance podcast, I'm going to be teaching you how to build wealth on a low salary.

If you guys have any questions, make sure you join the Master Money newsletter by going to Mastermoney.com slash newsletter. and don't forget to follow us on Apple Podcasts, Spotify, YouTube, or whatever podcast player, you love listening to this podcast on it. If you want to help out the show, consider leaving a five-star rating and review on Apple Podcasts, Spotify, or your favorite podcast player. Now, today, I'm going to teach you how to build wealth on a low salary. Because what if I told you that even though you don't make much money, you can actually become very wealthy? In fact, if you have enough time, you can become a multimillionaire.

And the reason for this is consistency and discipline. And I'm going to show you the exact framework and the exact steps that you can take in order to become wealthy, even if you don't make a lot of money. See, when I first started, I made $30,000 per year at my first entry-level job. And I was able in just two years to go from $30,000 per year to being able to save up my first $100,000 and a few years later, becoming a millionaire. Now, that is something where I was really, really disciplined when I went through this process. But anybody in this world can build wealth. And I'm going to show you a bunch of different examples. So to start off this episode, I'm going to go through four different stories,

four amazing stories of people who actually became millionaires on very low salaries. Then what we're going to do is we're going to dive into the framework of exactly how you can do it to. And we're going to talk through this step by step. I'm going to give you all the steps in this episode. so you know exactly what to do. Because guess what? This is the time where you can absolutely change your life. And if you don't make a lot of money, I want to be the first person to tell you that you can absolutely become a millionaire. But first, you need to know what steps to take and you need to be consistent and disciplined when it comes to those steps. Because when we don't make a lot of money, our opportunities start to shrink.

And so we have a couple of different options that we will dive into today. Now, the first person I want to talk about is Ronald Reed. And I'm going to read some of the stories of these amazing individuals so that you can understand that you too can absolutely do this. So Ronald Reed lived a life almost no one noticed. He worked as a janitor and a gas station attendant in Battleboro, Vermont. He drove a used car, wore a safety pin on his coat instead of replacing a broken zipper, and lived in a small, modest home. To everyone around him, Ronald was just a quiet, frugal man getting by on a working class income. But behind the scenes, Ronald was doing something extraordinary.

Every time he had extra money, he invested it into high quality dividend paying companies like Procter and Gamble, Johnson & Johnson, and ExxonMobil. He didn't trade, he didn't speculate, and he reinvested dividends and held for decades. Quietly, year after year, his portfolio compounded. Now, the amazing thing about this is nobody knew Ronald even did this. And so when Ronald died in 2014, his estate shocked the entire town. He had amassed over $8 million, almost all from investing, not income. He left millions to the local library and hospital.

And Ronald Reed became the ultimate proof that wealth is built not by how much you earn, but by what you do with what you earn. And so this is the first example that I remember the day that Ronald Reed died. It came out in the newspaper. And I read this story and was absolutely amazed. And at that point in time in 2014, I was working my day job. I was working my 9 to 5. And when that was going on, I remember being so inspired by this and so inspired by

this story that it absolutely changed my life going forward. You can read the book called The Millionaire Next Door. And in The Millionaire Next Door, it shows that true millionaires, most millionaires in this country are people who did it by living a modest life. And so one of the examples right here is that Ronald Reed was a janitor and a gas station attendant. Those are the two jobs that he held and had $8 million by the time he died in his 90s. This is because he allowed compound interest to do the work. He reinvested dividends and he just invested in blue chip stocks during that time frame.

And so this is a powerful lesson for a lot of us to take is you can do this too. You can do exactly what Ronald did because if you have enough time, you will be able to take those dollars and invest them over time and it can grow. But let me give in another example, because I want to talk about Grace Groner here. She worked as a secretary at Abbott Laboratories for decades. Now, she earned a modest salary. She never married and lived in a one better apartment with very simple tastes. She didn't travel extravagantly, and she didn't drive luxury cars.

On the surface, her life looked financially unremarkable. In a 1935, Grace made a decision that would quietly change everything. She invested $180 into Abbott. its stock and never, ever sold it. Not during recessions, not during wars, not during market crashes. She simply let the business grow and reinvested dividends for more than 75 years. When Grace died in 2010, her investment was worth approximately $7 million as a secretary. She left nearly all of it to fund scholarships for students who otherwise couldn't afford college. Now, her story is another masterclass in long-term ownership, patience, and compounding power.

Now, here's something that I think Ronald and Grace can teach us here, is both of them lived through some pretty drastic economic indicators where a lot of people will sell, they will say to themselves, I am invested in these stocks, but the stock market is moving up, the stock market is moving down, and I need to think about selling my investments. Instead, they stay invested and they stuck to their investment plan. And I think this is a really powerful lesson. for a lot of us. The third story is Anne Schiber. So Anne Schiber spent her career as an IRS auditor in New York City, earning under $4,000 a year for much of her working life. She never married, she lived alone, and retired quietly in the 1940s. By traditional standards, her career would have

never suggested wealth. But Anne was a disciplined investor with an iron stomach. She saved relentlessly and invested primarily in high-quality dividend-paying stocks like Coca-Cola and General Electric. She avoided debt, lived frugally, and most importantly, never sold during downturns. When Anne passed away in 1995, the world learned that the quiet IRS auditor had built a portfolio worth $22 million worth $22 million right now in today's money. It is absolutely incredible. That'd be worth about $50 million inflation adjusted right now. No inheritance, no big income, just consistency, discipline, and time.

So to have a $4,000 per year salary because Anne was born in the early 1900s, and to have $22 million by the time you died is an amazing feat. And so buying these investments over time and reinvesting those dividends is how Ann did it. The last one I want to talk about before we dive into the tactics here is Theodore Johnson. So Theodore Ted Johnson worked for UPS for over 40 years as a driver and a manager. Now, he wasn't a high-flying executive. He didn't have a flashy salary, but he consistently invested. in his company stock through the employee stock purchase plan. Now, if you have an employee stock purchase plan at your company, it is actually a really powerful lever that you can pull. Now, Ted held

his shares for decades, reinvesting dividends and ignoring market noise. While others tried to time the market or chase hot investments, Ted focused on ownership and patience, and UPS grew and so did his wealth. By the time Ted retired, his investment holdings were worth more than $70 million, much of which he donated to charities and community causes. Now, his story shows the hidden power of steady investing inside ordinary jobs and how patients can turn blue-collar work into generational wealth. Now, some of you may be saying to yourself, well, these are four outlier examples. They all got lucky. They invested at the right time. They invested early and often. Guess what? You can do the same exact thing. There is generational wealth to be had over the course of the next 30, 40, and 50 years,

and you have the opportunity to go ahead and take it, because small amounts of money invested over time can grow to very large amounts of money. I just gave you four very specific examples of how that works. Now, if you're thinking to yourself, okay, well, I'm inspired by these stories. I believe that I can focus on the things that I can control, and I'm going to take action right now,

and I want to make sure that I can go out and do that. Well, I'm going to show you step by step exactly how you can do that next. All right, so we're going to go into the exact steps of what you need to be doing in order to ensure that you can build wealth on a low salary. And step one is you need to understand where you currently are right now. We need to figure out exactly how much we are spending every single month and what our expenses are because this is a very important metric to note so that we can figure out how much we have left over every month to put towards wealth building activities.

If you want to be a multimillionaire by the time you retire and you have time on your side, then we need to make sure we get those dollars working right now. And in order to do that, we need to know how much we spend every single month. Now, some of you may already know how much you spend every single month, which is a great number to know. But some of you may not. And if you've never done this before, I'm going to show you exactly how to figure out this number. So first, we need to go and look back at least three months and figure out how much we spend every single month. So you can go and download your bank statements online, and you can take those bank statements and figure out how much you spend every single month on average. You just take the

total amount of how much you spent over those three months and divided by three. Now, when you do this, this is going to be the number that you get. You may be saying, well, just Christmas just happened or we had the holidays over that time frame. I don't care. We want the average of the last three months. If you want to go back further and get a more accurate average, you can go back six months or 12 months if you want to and figure out exactly how much you spend. every single month. Because here's what we're going to do. From there, we're going to figure out what our baseline expenses are.

Now, what is a baseline expense? This is your needs. These are the things that you must spend money on. These are the things that you absolutely must cover in order to get by in life. So I want you to think about your housing, your food, your transportation, your kids' childcare. Those are your needs. Those are the things that you absolutely need to cover every single month.

And every single person is going to have different needs. Now, when it comes to your needs, you want to make sure they fall within a specific range. You want to make sure they are 50 to 60% of your income. Now, they can be below 50% of your income, but for most of you, especially if you're on a low income, then they are going to most likely be within this range or higher. Now, this is going to tell us a lot of different things,

because once we figure out exactly what our needs are on a monthly basis, we can then say, okay, well, is it in this range between 50% to 60% of our income? And so I want you to go through and list out all, of your needs that you spend money on every single month. Go through those bank statements and list it out. You can even do this in chat GPT if you want to. Just cross out all of your personal information so it doesn't see all that specific information. But you can go into chat GPT and say, hey, what have I spent money on that are part of my needs?

And you can start to get closer accurate depiction. But I would highly recommend that you go through these statements and actually look and pull this stuff out so that you can understand where you are. because if you are above that 60% range, meaning if you're outside of that range of 50% of your income, then we have one of two problems. One, we are either overspending in some of these categories or two, you have an income problem. And we're going to think about that as we go through this process.

Step two is then we want to think about how much we spend on our future selves. Our goal is to try to get to 20% or more of our income getting invested. But any amount that we can possibly put together here is wonderful. Even if you can get $100 a month, $50, $200 a month, $150, $200 per month, your money can compound so much faster and grow so much more than you could ever work. You cannot outwork your money. And once you get your dollars invested, this is going to absolutely change your life. And I want you to see this as time goes on here.

And so when we do this, we want to make sure that we are looking at trying to figure out how much we have left over. Is it 20 to 30 percent? And then we want to also have some left over for fun money to go out and actually enjoy life. Because money is also a tool to be used so that we can go and enjoy life. Yes, the financial guy is telling you to go spend money on fun stuff. And I want you to be able to do that. And once we get this system down, you're going to be able to do that.

I want you to remember this. Fun money is a big part of financial planning. And once we get our financial plan together, we're going to go and enjoy life. But in addition, we're also going to be saving for our future self and come. all of our basic needs. Imagine a life where you could do all three of those things, how your stress and anxiety would melt away. How much better life would be? They say money doesn't create happiness, but guess what?

Money does improve happiness over time to a certain extent. Sure, there is diminishing returns over time. But for most people who are on a low income, your happiness will go up by making more money. I promise you that, and we're going to talk more about that here. So we need to understand where we currently are. Then secondly, we need to know how much money we make. We need to know our gross income, and we also need to know our net income. So your gross income is before taxes.

Your net income is after taxes. How much actually pitch your bank account every single month? Once we know those two things, we're going to know how much we have left over. And this is going to help us tremendously when we start to plan. So get that number. How much do you have left over after you cover your baseline costs or your needs? How much do you have left over sitting there for fun money and future you? and we're going to talk about what to do with that now.

So step two is I want you to look at two different things. Now that we have an understanding of where we currently stand, I want you to first capture or see if your employer has a employer match. So this is something where if you go and talk to your employer and say to them, hey, do we have a 401k match or do we have an employer match here? And if you do, I would highly recommend that you take advantage of this because this is going to help people who don't make a lot of money. leverage the amount that they're investing very quickly. First of all, if you don't know what

an employer match is, this is where you can contribute money to like your 401k or your company's HSA. Sometimes they have them in a Roth 401k. And when you contribute money to that 401k, your employer will also match the amount that you put in. Sometimes it's a 100% match, sometimes it's a 50% match, but they will put additional money in there for you just for contributing to it. It is literally free money. It is a 100% rate of return. turn. And so if you are someone who doesn't make a lot of money, taking advantage of just your employer match alone over the course of 30 years can ensure that you have an extra 500,000 to a million dollars in your investment accounts just by doing this. And we need every advantage we can get if we

don't make a lot of money. And so this is something where we want to make sure that we are getting that employer match. So go to your employer and ask them, hey, do we have a 401k plan if you don't know. If you do, is there an employer match program? Do you have a program where you're going to match my contributions? And if that's the case, you must take care of that first because it's a 100% rate of return and nothing else will provide you that return. And so the next thing we're going to do in step two here is we're going to focus on starting our emergency fund. Now, if you don't know what an emergency fund is, this is cash that we save up in a high yield savings account typically that allows us to protect our finances against life. Your truck,

breaks down or your car breaks down or your kids get sick or you have to repair a sink or you have to run the store to repair something in your house. All of these different things are emergencies. They are financial situations that can pop up and we want to make sure that we are building an emergency fund to protect our finances against life because having cash on hand is where your stress and anxiety are going to be eliminated. Cash is power. Cash is comfort. Cash is protection when it comes to a financial plan. And so you must have cash on hand. People who don't have cash on hand, those are the folks that live paycheck to paycheck through their entire lives. If you want to get out of that paycheck to paycheck cycle, if you're sick and tired of being in that paycheck to paycheck cycle,

we must have cash on hand. And so getting one month of expenses first is going to be the ultimate goal. Now, if you don't make a lot of money, that sounds like a daunting task to get one month of expenses saved up. But I promise you, just getting the ball rolling and getting this started is going to be really, really important. Because ultimately, our goal is to have multiple months of cash saved up. But getting just one month saved up is going to protect you against life and some of the things that can happen to you. Okay. And so we want to make sure that we are getting one month saved up first. Now, step three is if you have high interest debt, we want to get rid of that. So maybe you went into debt over the holidays. Or maybe you've been in credit card debt your entire life. Or maybe you have a lot

of buy now, pay later loans because that's the only way you can afford. some of the things that you want. Or maybe you have a personal loan. Or maybe you have a really high interest car payment because you had a bad credit store. All of these are things that we need to make sure that we get paid down. Specifically for those who have a credit card or anything above a 6% interest rate outside of your mortgage, those are debts that we want to make sure that we get paid down as fast as we possibly can. The reason for this is debt is robbing you of your financial freedom. Debt is robbing you of the ability to actually be able to build wealth. And if you have way too many car payments or if you have way too many credit card payments where you're trying to

pay these down and you can never get ahead because you're a slave to debt all the time, this is the cycle you want to get yourself out of. And it is very, very important that we eliminate this debt as fast as we possibly can. And so I highly encourage each and every single one of you to focus your time and energy on getting this debt paid down. So how do we pay down this debt? The snowball method is the proven way that psychologically keeps people motivated when they are paying down debt. There's two ways to do this, but the snowball method is a great one for those who are trying to get the ball rolling. So here's what you do. You list out all of your debts, and I want to know a couple of different things. I want to know how much you owe. I want to know what your interest rate is, and I want to know what your minimum payment is every single month.

And what we're going to do is find the debts that have the lowest balance. So let's say you have $300 on Buy Now Pay later at a 7% interest rate and you have $2,000 on a credit card with a 20% interest rate and you have another personal loan that's $500 at a 10% interest rate. We're going to pay the lowest balance down first. Then we're going to move to the next one. Then we're going to move to the next one. And when we do that, we're going to make sure that A,

we start to make the big chunks of payments on the lowest balance. We pay the minimum payments on everything else. Once the lowest balance is paid off, we take all of that money that we were attributing to the lowest balance and we move it to the next lowest balance. This is going to allow us to start this snowball effect where you have more and more cash that you were throwing towards these debts. So instead of you paying minimum payments on every single piece of debt, we're going to take some of our extra money and start to throw it towards the smallest balance so that we can start to snowball this and get more dollars towards our debt. Because once you are debt free, I don't ever, ever want to see you going back into high interest debt. again. Some debt is okay. It depends on what you're doing. If you're going out and buying a house, it is okay to take out a mortgage. Don't let anybody tell you not to take out a mortgage or pay cash for

a house or whatever else you're doing. You can absolutely do stuff like that, but there's good debt and there's bad debt. When you have high interest debt, that is crippling towards your financial health and I want you to make sure that you are getting out of that. Now step four is we're going to build out our emergency fund more. So once you get that high interest debt paid off, we want to focus on trying to go towards three months of expenses in our emergency fund. Now, we call this the one-three-six method, because if you noticed, in step two, we talked about making sure that you get one month of expenses saved up. Now, that may take you some time. Then you pay off that high interest debt. If you don't have high-interest debt, you move to step four. And in step four, what you're going to do is

try to save up enough to get to three months of expenses. Three months can protect you against a lot of things in life. Three months can protect you against a short-term job loss. Three months can help protect you if a big medical bill popped up or if you had to replace your roof. All of these are bigger ticket items. We need to make sure we have some cash on hand to protect us against that. Three months can also help you if you need to move across the country for a much higher paying job. And for a lot of people, they can't take advantage of opportunities like that because they don't have enough money for the move. And so this is going to help you tremendously when it comes to this. So once you start saving for those three months of expenses or even if you're paying down that

high interest ad, I want you to focus some time and energy on finding money. Because one of the biggest things that you can do to solve half of your problems on a low income is increasing your income over time. And so I would recommend that you go and see if there is money just laying around at your house. Can you sell things on Facebook marketplace? Are there things that you do not use anymore? Can you sell things on eBay? For example, there's a lot more things that you can sell on eBay than you probably even realize. From kids toys to used shoes to even your clothes, you can sell on eBay for things that you don't wear anymore. And so I want you to understand every extra dollar that you earn can be put towards that emergency fund, can be put towards paying down debt,

can be put towards things that actually matter. So I highly recommend find things in your garage, start selling things you don't use anymore on Facebook marketplace, start taking those things, even if it's five bucks. It doesn't matter because every extra dollar here is going to help you put towards your investments, that emergency fund and everything else that we are trying to do here. And so looking to find money and looking for ways to reduce costs is really important. Another thing is to make sure you negotiate your bills, things like your cable, your internet, your cell phone bill, all of those are negotiable. And if you can reduce some of those expenses, you just found a bunch of money every single

month. Also, your car insurance is a huge one. Make sure you're shopping your car insurance. Make sure you're shopping your home insurance. That can save you thousands of dollars every single year. And then lastly, if you're someone who is working on these goals, if you're working on saving up enough money, take on some side gigs, find some gig economy work that you can do in order to help you boost your way towards getting towards that emergency fund.

then we can focus our time and energy on ways that are sustainable to help us increase our income over time because the more dollars that you can earn, the easier this problem is going to be to solve. Income is the catalyst to building wealth. And the more you can increase your income over time, even if it's gradual overtime is going to dramatically help you get to the next level. So once we're saving towards our emergency fund, we also want to think through an established step five, which is establishing your savings rate. Now, for those of you who don't know, your savings rate will actually dictate how long you have to work. If you want to become financially independent one day and you don't want to have to work anymore,

your savings rate is a huge indicator that will tell you how much longer you will be working. Now, there are a number of different ranges that people talk about when it comes to savings rate. We here like people to save at a minimum 20%. A lot of other people will say we'll save 15%. But the problem is if you save 15%, you were going to be working for a very long period of time. And so I want you to understand why your savings rate is so impactful and why this is so important to note. So if you have a 10% savings rate, meaning you're only saving 10% of your income and you got a 7% rate of return on your investments, you'd be working for 43 years. If you got a 20% savings rate and you got a 7% rate of return on your investments, you'd be working 29 years.

At a 30% savings rate, you'd be working 22 years. At a 40% savings rate, you'd be working 17. at a 50% savings rate, you'd be working 13 years, and at a 60% savings rate, you'd be working 10 years. At a 70% savings rate, it'd be seven years before you could retire. Now, that's living on the same amount that you're living on right now. You'd be able to retire and live off your investments based on the 4% rule. Now, this is why it is so important for a lot of folks out there to understand what their savings rate is. This is a number I want you to know, because once you know this number, you can figure out, hey, this is how long I have in

retirement. Now, if you're someone out there is like, I can only save 5% of my income. I'm trying to figure all of this out. I'm trying to figure out what I need to do next. Here's the goal. What we want to do is start with that 5%. That is better than nothing. Don't say, I don't really, I'm not investing much so I shouldn't even do it. Or I'm not investing much so I'm not even going to try. I'm not even going to go for this. No, every single dollar that you put towards your investments is a huge, huge impact going forward. And so we want to make sure that you are saving whatever you can. then let's focus on finding money, finding ways to negotiate our bills, finding ways to increase our income, finding things that we can sell to help us increase our income. Once we start to increase

our income, we increase that savings rate by 1% every single month or 1% every two months so that we can start to dial it up until we at least get the 20% savings rate because as you can see, a 20% savings rate means you'll only be working 29 years. I don't want you working 40 or 50 years of your life because you have a low income. I want you increasing that income so you can retire one day. So you can be financially independent. So you can spend more time with your kids and your family members. This is what we want for you. And so to be able to do that, you need to understand what your savings rate is and track it over time. So let's work on increasing our savings rate if we can only save a little bit. That is going to be a huge, huge key going forward. Now step six is to

maximize your tax advantage accounts. So this is, you may have heard the terms 401k or a rock. IRA or HSA, these are fantastic accounts that are going to help you over the course of the long term. So when you have this savings rate set up and you're like, well, where do I put this money? Well, first, obviously, we're going to look at our emergency fund. And once we have that emergency fund funded, next, we're going to be going towards some of our investments. And so what we want to look at is things like the 401K. When you get that 401k match, you can either increase contributions to that over time or you can look at other things like the Roth IRA.

And for those who are on a low income, the Roth IRA is an awesome, awesome account for you. Why? Because money goes in. That's already been taxed. Then it grows tax-free. And when you retire, you can pull the money out tax-free after the age of 59.5. And so this is something where that tax-free growth is going to be a huge, huge motivator for a lot of folks out there. In 2006, you can put $7,500 in a Roth IRA.

And so this account is really, really powerful for a lot of folks looking out there. And so the order that I would look at that, this is the raw IRA first, and then your 401k would be the second option if you max out that Roth IRA or find enough money to max out that Roth IRA. Now, step seven, you may be saying to yourself, well, that's all well and dandy that I can start to invest my money into these accounts, but just because I'm putting money in this accounts doesn't mean it's actually invested. You still have to choose your investments. So what kind of portfolio should you even consider or should you look at? So I'm going to tell you a couple of different types of portfolios where you can think about

this to make it easy. Now, do your own research, do what fits your risk tolerance, but I'm going to give you just a couple of ideas. There's a bunch of great beginner strategies. One is just the simple path to wealth strategy, meaning you just buy a total stock market index fund, and you just hold that for the long period of time. There's a book called The Simple Path to Wealth with J.L. Collins, who's coming on the show, by the way, in a couple of weeks. So if you want to hear that episode, make sure you're subscribed. But he has a portfolio, basically just one index fund. He buys VTSAX. What that is is just buying the entire stock market. In one trade, you're buying the entire stock market.

Another great one is target date retirement funds. If you have no idea what you should be investing in, looking at target date retirement funds, which a lot of times are inside of your 401K or a great option. Another one is a great index fund and ETF portfolio. So you can do something like a three fund portfolio, which has 70 to 90% of U.S. stocks, 10 to 20% of international stocks, and 10 to 20% of bonds. That's another great one that you could put together. And the last one I'll give you is the Warren Buffett portfolio. That's a 90-10 portfolio, and it's 90% U.S.-based S&P 500 index fund, and then 10% of bonds. And so those are four portfolios that you could look into and dive into deeper to see which one fits your risk tolerance. But these are great options for long-term wealth building, especially if you're just looking for the slow and steady wins the race method. And that's what we talk about here is over time. We want to grow our wealth by utilizing time and compound.

interest. We want to make sure that we are maintaining the market. And so that is the big key here of what we want to do as long-term investors is we want to make sure that we are not trying to beat the market. We're not trying to time the market. Instead, we just stick to our plan. We invest every single month and make sure that we hit our goals. So in the next step, we're going to talk about making more money right after this. I remember when I needed to hire someone fast, but finding the right person quickly felt impossible. And if you've ever been there, you know how stressful this can be. That's where indeed comes in. When it comes to, the hiring, Indeed is all you need. Instead of struggling to get your job post noticed, Indeed's

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This is the fastest way to solve a lot of your financial problems is to increase that income and then take that extra income and put it towards wealth-building activities, things like your investments, things like your emergency fund, or things like paying down high interest debt. And so we want to find ways to earn more money. And so I'm going to give you a bunch of ideas here of ways that you can go out and earn extra money on top of what you do from your 9 to 5. Now, the fastest way to earn more is to learn how to negotiate your salary at your 9 to 5.

And if you want to learn more about how to do that, we have a step-by-step e-book on exactly how you can do that. If you go to mastermoney.com slash resources, we have the e-book there for you. But I'm going to give you a couple of other options where you can think through how you can earn more money. Number one is doing things like skill-based freelancing. So let's say, for example, you are a teacher. And if you're a teacher, one of the best opportunities that teachers have is tutoring. Because with tutoring, you can boost your income and a lot of folks can double their income if they really put in the hours in tutoring.

Now, obviously, school day drains you. It's a lot more work than you normally would think, but you want to make sure that tutoring is a big, big part of what you do. If you can dedicate a couple of hours every single night where you're making $40 to $70 per hour, that is going to help boost your income dramatically, where you can take all of that tutoring income and put it towards investments, put it towards, your financial future. Put it towards growth so that you can get ahead in this life. And this is one of the most powerful things that you can do. Or if you're someone out there who's really good at writing or

proofreading, or if you're someone out there who is really good at design or web development, maybe you want to be a bookkeeper or even a virtual assistant. You can do all of those different things and do them online. And so this is a great way to earn some extra money by doing some gigs, trading time for money, so that you can take those extra dollars and put them towards your investments. So you can go on Upwork, you can go on Fiverr, there's a bunch of different websites where you can find clients like this, and just really starting to get the ball rolling is one of the most powerful things that you can do.

And if you put in 10 to 20 hours per week, you can make anywhere from $500 to $2,000 extra every single month just by doing this stuff. And so finding the right clients is going to be a really, really powerful thing. Two is the gig economy. So if you are in debt, you're trying to get out of high interest debt or getting out of credit cards or you're just trying to build up that emergency fund as fast as you possibly can,

doing things like Uber or Uber eats, or DoorDash, all of those are fantastic options where you can start with these, and I'm not saying do this forever, but you can start with these to kind of establish some of your financial goals so that you can get those in place and then work on increasing your income in other areas that are more sustainable long term. And so doing that gig economy stuff short term is absolutely fantastic. Number three is making money with stuff you already have. So let's say, for example, that you have a spare bedroom. Could you go out and get a roommate and rent out that spare bedroom? that would save you a lot of money in it of itself.

Or if you have some extra space for storage, can you rent out your garage so that somebody can store space there? There's a bunch of websites that allow you to do that. Or is there parking spots or equipment that you own that you can rent out? Again, you can also sell items you no longer use. Facebook Marketplace is amazing for this. I don't care. I'm even the type of person that will still take $5, $10, $15 for any given item.

A lot of people will say, well, I'm not going to waste my time with that. No, I'm going to waste my time with that. I'm going to take that and sell those specific items. So all these are different ways that you can earn some extra money. But again, utilizing your skills and developing your skills is going to be the number one way to accelerate your income fast. And if there's a skill you want to learn, maybe it's video editing, maybe it's web design, maybe it is AI. All of these skills can be very, very powerful that you can then sell services based on those skills on the side. And you can make a lot more money doing that.

And the last thing I'll say is, again, make sure that you learn how to negotiate your salary, have conversations with your boss so that you can get your income increased. And that is going to be the fastest way over time to make sure that you are making more money. But all this takes some extra work. All this takes you going out there and putting yourself out there to try to make it happen. And the more and more you do this, the first couple may fail. The first couple side hustles I did, they all failed. But guess what? I picked myself up and I kept doing it over and over and over again. I did everything from selling things on eBay, which I still do, selling things on Amazon. I started a side-of-the-road Christmas tree stand. I started a side-of-the-road Christmas tree stand. I started

multiple different websites. I tried everything to make more money. A lot of them failed. And then the ones that did not fail, I started to learn more about business. I started to learn more about what works. I started to learn more about how to refine ideas before I started them.

And all of a sudden, you get better and better and better at this. So I highly encourage each and every single one of you to keep on pushing and keep on trying when you're trying to make some extra money. All right. So step nine is I want you to think about lifestyle inflation and make sure that you try as much as possible to prevent lifestyle inflation.

So if you don't know what lifestyle inflation is, it's when you start to make some more money. When you make that extra money, you also raise your lifestyle to the level of your new income. So let's say, for example, that you learn how to negotiate your salary by reading our e-book.

And all over the course of the next six months, you've got to raise at your job. And so now you're making an extra $1,000 every single month that's hitting your bank account net. If that's the case, then what a lot of people do is then they go out and say, oh, I can now afford a brand new car. and they go out and get a new car, and now they raised the amount that they are spending every single

month by $700. Then they go out and say, hey, I'm going to start buying some extra stuff, maybe getting the nicer groceries now, maybe getting the brand name groceries, and they raise their lifestyle another $300. And then all of a sudden, they are back at square one, living paycheck to paycheck because they increase their lifestyle based on how much they made. Now, for those of you out there who don't make a lot of money, you're like, man, I would love to do some extra things, and you absolutely should. And so we created a rule for you. for this so that you can have some lifestyle inflation, but also save a portion for future you. Save a portion so that you can actually build wealth over time. And the way to do this is the 50-50

rule by taking 50% of the newfound money that you make and you can spend it on whatever you want as long as you're not in debt. And taking the other 50% and putting it towards your investments, putting it towards your emergency fund. This is the way that you can enjoy life, but also be able to build wealth for future you. And every single time you get a raise, if you continue to do this, you're going to become a very wealthy person because you're increasing the amount that you're investing every time and you're also able to increase that lifestyle. Get the nicer apartment over time or finally buy that house or all those different things that you actually want to do in life, you're going to be able to do them. The second thing to do to make sure lifestyle inflation doesn't

get out of hand is automate your savings. So every single month, you should automatically contribute your savings or contribute your investments to those investment accounts so that you're not trying to rely on your willpower. And automation is the key to really building wealth without having to lift a finger. And so I highly recommend that you send automatically savings to your high yield savings account or send automatically money to your investment accounts before you even spend it on anything else. This is going to make sure that you pay yourself first, which is the most important thing that you can do. Always, always, always, always pay yourself first. Number three, I would highly recommend every single year you do an annual spending audit. So look at how much you spend.

spent the previous year, and every single year, then look at how much you spent this year and see how much it has gone up over time. If it has gone up way too much, then maybe we just find ways to reduce some of that spending. But if it has gone up just the right amount, then you are doing a okay. And so this is the area where we can start to do these annual spinning audits and make sure we are on track before it gets way out of hand. Number four is using the 48 hour rule. So anything above $100, if you're going to go out and spend it, that's not a necessity or a need, I would consider using the 48-hour rule. So before you buy it, you can make sure that you put it on a list and just wait 48 hours. Wait that cooling off period to make sure you really want that item.

Now, if it's a bigger ticket item or a more expensive item, I would wait over a week to make sure you really want that item because that is going to be the best possible way to ensure you don't make these random purchases that you don't really want. A lot of us make frivolous purchases because Amazon's buy now button is really easy or Walmarts or targets. And so you can go out there and just buy random stuff. Instead, if you have this cooling off period, 60% of the time, studies have shown that this cooling off period actually ensures that you don't buy that specific item. And so this is a very interesting thing when it comes to money psychology.

A lot of us just want the thing now because we want that dopamine hit. After we buy that item, a lot of times we really don't even want it. And so having that 48-hour cooling off period can really, really help. Now, number five is having money positive social circles. This is part of the reason why we created Master Money Academy is a lot of us are working towards financial goals. And so when we are talking about money, all of us are working towards those goals and we are keeping each other accountable.

And so I highly encourage you to find people who are working on common goals just like you who are working through some of these problems so that you can ensure that you have accountability partners. Accountability is everything when it comes to money. And I really, really want you to try to make sure that you have. have those partners in place. All of these are going to help you tremendously when it comes to staying on top of lifestyle inflation and when it comes to making sure you stay on track towards your goals. Now, step 10, and this is not for everybody, but I want you to consider house hacking. So housing

for most people is one of the biggest expenses that they have. Now, house hacking can be something like getting a roommate like we talked about earlier, but house hacking can also be a number of different other things. One of the best ways to house hack, especially if you are young or you're single or you don't have a big family yet, is to think through, something like a duplex. So you can go out and you can buy a duplex and live in one unit and then rent out the other unit. This is either going to reduce your housing cost to a minimal number and or you could even eliminate your housing costs and some people make money when they house hack. And so this is a fantastic way to really early on, if you don't make a lot of money, this is

going to be something that's going to help you tremendously because you can earn an extra $1,000, $2,000, $3,000 every single month just by living in one unit and renting out the other. And so this is one of my favorite ways to build wealth. I can never get my wife to do it, but it was something I wanted to do early on before we had kids. And it is a great way to reduce that housing cost. But secondly, you can rent out a room to roommates or a friend if you know them already and reduce housing costs that way. Third, if you have an ADU or an accessory dwelling unit, like a mother-in-law suite or an extra unit outside the house, you can rent that out. And this can have a huge financial impact. Let's say, for example, you rent out a unit and you get an extra $600

every single month. Well, an extra $600 every month means an extra $7,200 every single year. You can use that to almost max out your Roth IRA if you wanted to and really make a tremendous impact on your wealth building ability. Or if you're in debt, you can literally eliminate your debt an entire year just by doing this. And so this is something where thinking about this is going to help increase your income dramatically, especially if you don't make a lot yet. And you're going to make more going forward. We know we're going to work on ways to increase our income. But right now, if you don't make a lot, is the fastest way and easiest way to reduce some of your housing costs. Now, step 11 is I want you to think about transportation. Now,

transportation is one of those areas where we as Americans spend way too much money on transportation. And so if you have a big car payment, but you don't make a lot of money, you are doing it backwards. And I want you to understand that your car payment, it could be a detriment to your wealth building ability. And so if you're spending $700 a month on a car payment, when you only make $40,000 per year, then this is a huge, huge problem. So instead, what we need to do is find ways to find reliable transportation where we can get rid of those car payments and then drive those cars longer. So we came up with a rule called the 24-1210 rule. The way that this works is that when you go out and buy a vehicle, the best way to do it is obviously cash. But if you can't pay cash, which most

of us can't, then you put 20% down. The loan is no longer than four years, 12% or lessier, income goes towards transportation costs, meaning 7% towards the loan and 5% towards repairs. And you drive that car for 10 years or longer. Now, what is this going to do? This is going to, A, make sure that you don't have car payments forever. Where if you drive that car for 10 years or longer, you're going to have car payments for four years. And for six years, you're going to have no car payments whatsoever.

And you can use those extra dollars to either save up for your next car or put them towards investments or put them towards your emergency fund, anything that you are looking to do to build wealth. because we need every single edge that we can get. And if you don't make a lot of money, wasting your dollars on depreciating assets, like cars that go down in value every single year over the course of the first year alone,

if you buy a brand new car, that car's value is going to go down 30%. And if you don't make a lot of money, those are not gambles that you need to be taking. Instead, you need to make sure that you are driving cars for longer periods of time. Repairing those cars, having a repair fund on the side,

is usually the best decision overall. And continuing to do that, as long as it is a safe and reliable, vehicle is the best option. So I drive my cars typically 10 years or longer. And so right now, I'm driving a 2018 car and I'm going to drive that thing literally until it dies because that is just the way I drive and operate when it comes to cars. And most people should be doing it this way. Upgrading your car every single year is just throwing money into the wind. And if you love cars, I get it. That is something where if it's your passion and you want to use your fun money towards

cars, I completely understand. But at the same time, for most of you out there, there, it is a depreciating asset, and it is one of those things that you really, really are going to need to sacrifice in other areas if you want to always, always be upgrading your car. And so for most of you out there, trying to reduce your expenses around cars is going to be really important. And then step 12 is learning to maintain consistency and discipline over decades. And I'm going to give you a couple of ideas of how to do this over time. Principle number one is never stop investing during downturns.

What a lot of people will do is they'll say, hey, buy low, sell high. But then when the time comes to do some buy low, sell high stuff, they don't actually want to do it. When the market goes down, that is not a time to just stop investing. Instead, just consistently thinking about your plan and consistently investing is what I want you to do. Number two, ignoring portfolio values for years at a time. When you don't make a lot of money, and if you're not investing a huge chunk of money, you may not see those portfolios tick up as fast as you want them to. But ignore this because understanding how compound interest works,

once you get your dollars rolling, this is like a snowball rolling downhill. where it's going to be spitting off more and more cash as time goes on. But we need to make sure we are getting those dollars invested first. And so that's why we talk about your first 100K is the most important because once you get to your first 100K, you're going to start to see the benefits and you're going to start to see the growth of your portfolio slowly. Once you get to your first million, you're really going to start to see the massive benefits. Why does this happen? Let's think about it for a second. If you have $100,000 invested and you get a 10% rate of return, that means your portfolio is going to return 10% every single year.

Whereas if you have $1,000 invested and you get a 10% rate of return, your portfolio is going to return $100 per year. Those are two very different numbers that over time will make a drastic difference as long as you get to your first 100K, even your first 10K because $1,000 every single year that you didn't have. And so consistently investing over time is the true way to build wealth. And so making sure that you never stop is a huge key. Also, number three is learning to increase your contributions every single year.

Every year that you invest, if you can even increase your contributions 1%, 2%, a few hundred bucks, even if it's 10 or 20 bucks, it's going to make a drastic difference long term. Just someone increasing about $50 every single year over the course of 30 years can help increase the amount that you have in your portfolio about over $600,000. It is a huge, huge impact to make sure you're increasing those contributions every single year. And if you don't make a lot of money, this is going to be one of your cheat codes is to make sure you're increasing those contributions. And then principle number four is to live below your means consistently.

If you ever are someone who was like, I don't know if I could be a millionaire, even though you gave me all these examples, I don't know. I would highly encourage you to read the book The Millionaire Next Door. The Millionaire Next Door talks about hundreds of different people who became millionaires by living modestly to live below their means and they invested the difference. And I want you to do the same thing. Live below your means and invest the difference. It doesn't matter what your neighbors are doing. It doesn't matter what your friends are doing. You need to focus on you and your family so that you can live the life that you want in your future.

And the only way to do that is to make sure that you are investing consistently and investing often. And so what I want to do here before we wrap up this episode is I want to give you four different scenarios of people who if they start early or if they start often, if they start earning more money, that they can build wealth on a low salary. So the first one is the consistent early start where they start at age 25 and their starting salary is $35,000 per year. Now they have a 20% savings rate. And so that means they are saving $7,000 every single year or $583. every single month. And so their salary increases over that time frame, 2.5% per year, and they are doing it based on inflation and on merit. And their contribution increases, 50% of raises goes towards that savings, just like we talked about here. So they follow the 50-50

rule. If their salary increases 2%, they follow 50-50 rule and save 50% of that salary increase. And so their average investment return for these examples is going to be 7%. And by the time they turned age 65. If you started at 25 and you did that, even earning $35,000 per year and getting a 2.5% raise every single year, you'd have $2.4 million by the time you retired. Now, here's the key insight here. This person never earned above a $65,000 annual salary. And this person became a multimillionaire through four decades of just saving 20% of their income and discipline investing. This is a perfect example of someone who can do that if they have a lot of time. But let's say that you started late and you started at age 40 and your current salary at age 40 is $50,000.

But you have a savings rate of 30%. You learn to live below your means and you found a savings rate of 30%. This means you'd be saving $1,250 every single month. And you got a 2% salary increase every single year and your average investment return was 7%. By the time you turned age 65, even if you started age 40, you would still have $1.1 million. in that account, meaning you could draw down $40,000 per year of salary, and you can live off Social Security for the rest of that money. And so if you got a pension or you had other income sources, those would be extra income sources that you could utilize to be able to retire. And so the key insight for this person is starting 15 years later requires 50% higher savings rate to reach millionaire status,

demonstrating why starting early matters the most. But what if you were like, I'm not 40, but I'm also not 25, I'm right around 30. what would happen with me? Let's say you had a $40,000 per year salary and you're starting at age 30. But also, you decided, you know what? earning some side income could be awesome for me. I could definitely do that. I could pick up some tutoring gigs or I could go out and do some side gigs. And that extra side income is $6,000 per year. And at your primary job, you also saved 15% of your income and your side income savings rate is 75% of your income. And so by doing this, your total annual investments are going to be $10,000.

$500 per year. And you got a 3% increase every single year to your job. And your average investment return was 7%. Guess what? Just by adding in that side income, at age 65, you'd retire with $2.8 million. So just so you know, at $2.8 million, you'd be able to draw down just over $100,000 per year in retirement. Now, this is before Social Security and everything else. That is a pretty good retirement for someone over the course of the next 30 years. And so strategic side income can really increase your total investable income by 25%. And it accelerates your timeline by 8 to 12 years just by doing that. And so it could change the way that your retirement looks just by finding extra ways to earn

more money. Now, if you can find jobs or you can job hop or you can increase your income dramatically, then you don't even have to do that side income anymore because you can still follow these steps. Now, scenario four, let's say you decided, oh, I'm going to go out and actually house hack. that sounds really interesting. And if you started at age 28, and let's say you had a $45,000 salary and your house hacking savings was $600 a month or $7,200 per year. And so you contributed 10% of your salary towards your 401k or $4,500 per year, and you invested some of your house hacking money.

And so in total, you're investing $11,700 per year. And you decide, you know what, I'm going to house hack for 10 years. And then I'm going to turn this into a full-on rental property. I'm going to go out and buy my own house and this is just going to be a rental property for me and it's going to convert to a full rental with $400 per month and cash flow. And if you got an average rate of return of 7% and your property appreciate 3% on a $300,000 duplex at the end of this time frame, at the age of 65, you'd have $3.2 million in investments and a property value of $750,000, which means your net worth would be $3.95 million dollars. This is the power of just following some of these simple strategies. You don't have to make a lot of money. All you have to do is allow time to do the work for you. And if you figure out

some of these strategies that are going to work for you, you can become a multi-millionaire by the time you retire. And these examples show you exactly how to do this, because there are things that you can do to accelerate your path to wealth as long as you have to know how and you have the discipline to go out and do it. So here's what I want you to know. It doesn't matter where you were born. It doesn't if you were privileged or not. It doesn't matter where you started. It matters what you focus on and what you need to focus on is the things that you can control. This world is filled with situations you can't control. The weather, the politics, even the laws of the land that you live in. And so in a lot of scenarios, there are things that you can control, focusing on what you do day in and day out to help develop

financial freedom for your life, for you and your family. So I want every single person listening to know that you can change your life dramatically just by taking some simple steps, even if you don't make a lot of money. So that is why we created this episode, because I want you to know by following these steps, you can become a multimillionaire, even on a low salary. Thank you guys so much for being here on this episode. Make sure you're subscribed to this podcast if you're not already. And if you want direct help from me, consider joining Master Money Academy. It is linked up down the show notes below.

That is where we help people every single week master their money, learn how to grow their money, and figure out where to put their next dollar. Thank you again for being here, and we'll see you on the next episode. Rosen lasagna, medium power, 15 minutes. Sounds like Ojo time. Let's play. Feel the fun with Play-O-Joe, the online casino with all the latest slot and live casino games. What you win is yours to keep with no wagering requirements, instant payouts, and no minimum withdraws.

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