How to become rich faster

How can you become rich faster?

Become rich faster by taking control of your current finances and increasing your income. Look for higher paying work and purchase or build income producing assets. Seek to reduce your tax liability because taxes will be one of your biggest expenses.

Imagine, becoming rich and doing it quickly. You have more money to your name than the majority of your peers.

Becoming rich quickly is possible if you know a simple process.

Luckily for you, I’m going to show you how to become rich quickly. With the right plan, you’ll be able to retire early by owning cash flowing assets.

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How to become rich faster

To become rich faster, evaluate your finances for wasteful spending. Start increasing your income through higher paying work and purchasing or building income producing assets. Reduce your tax liability to keep the majority of your earned income.

Becoming rich quickly is a relatively simple process. The problem is that the majority of people are consumers, so they’re too busy spending money. 

In addition, people rely heavily on their 9-5 job to provide the majority of their wealth. You’re not going to get wealthy quickly by working a job. A 9-5 is for individuals who want to get rich slowly.

You’re not going to get rich sitting on the side lines. To build wealth, you’ve got to take action acquiring assets. Most people don’t build wealth because they’re too busy watching Netflix.

So let’s take a look at what you need to do if you want to speed up the process of becoming rich.

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Evaluate your current finances

The first step to building long term wealth is managing your current finances. You need a strong game plan for budgeting and tracking your income. Becoming rich is a numbers game. You can’t win a numbers game if you’re not tracking the numbers.

The reason why people making $100k per year or more aren’t wealthy is simple. High income earners spend the majority of their income on useless junk.

To build wealth, you need to find a way of budgeting. Track your spending, cut your extra expenses, and watch where your money is going.

Your goal is to create a gap between income and expenses. The larger the gap, the easier it’s going to be for you to build wealth.

Budgeting is like playing defense in sports. You can’t win the game by only playing defense, because you’ve still got to put points on the board. You also can’t win the game if you only play offense. 

So you’ve got to find the right balance, focus on offense, but don’t ignore defense.

Look for higher paying work

Increasing your income and investing is the only thing that’s going to make you become rich. The more money you can invest, the harder your money works for you. 

Look at it this way. Two people can live on $36,000 per year. One person makes $100k per year while the other brings in $50k. The first person can invest $64k per year and the other $14k.

Both budget and track their money well in order to be able to live on $36k per year. However, the person making $100k per year has more money.

Money is leverage for building wealth.

Changing jobs or asking for a raise is the biggest and easiest thing you can do to build wealth faster. A person making $50k could change jobs and then earn $60k. Doing so would allow you to invest an additional $10k per year!

Most people succumb to lifestyle inflation. Rather than investing the $10k per year difference in income, they spend it. 

Most of the time lifestyle inflation is hardly noticed. I make $10k more per year, so why not have nicer things?

Look for higher paying work every two years. Don’t be afraid of being labeled a job hopper. Your company doesn’t have any loyalty towards employees so you shouldn’t have loyalty to your employer.

Own income producing assets

Income producing assets are an amazing finance hack. An income producing asset pays you simply for owning the asset. Rich people understand the benefit of having assets which pay their salary.

You only have so much time in a day. Most individuals exchange their time for money in the form of a salary. Rich people are able to live off of assets which pay them for being an owner.

Your time is limited, because you’re working for a salary. You can replace your entire income with enough assets. These assets work passively, pay your salary, and free up your time.

You could invest your money into dividend stocks or REITs. These assets pay a dividend for owning shares. For example, a $1,000,000 portfolio with a 7% dividend yield would pay you $70k annually.

Build an income producing asset

Investing into income producing assets requires you to have money for investing. However, you can speed up the process by building income producing assets in your free time. The goal is to use your active income to purchase passive income.

For example, you currently work your 9-5 job and earn money as active income. This money is then invested into stocks which provide passive income.

I love passive income, but your job is only going to pay you so much. Most companies don’t want to pay you more, so you need to create your own income.

You can spend your time building a blog, YouTube channel, product, or other asset. Most assets can be built in one hour per day if done consistently over time. Eventually, your income producing asset can make more money than your 9-5 job does.

So what if it takes you 5-10 years to build your first asset? How much time do you have left until you’ve reached retirement age of 65?

You could build an asset starting at age 40 which takes you 5 years to earn a full-time income. You’re now 45 years old and can retire 20 years early, because you built something. 

Reduce tax liabilities

Taxes are going to be your biggest expense, so you need to find a way of reducing your tax liability. Once you’ve started earning money from your income producing assets, you’ll want to find a good CPA to help.

For example, you can take advantage of your 401k or Health Savings Account to reduce tax liability. A CPA should be able to understand your situation and help make beneficial tax strategies for you to follow.

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Summary: How to become rich faster

As you can see, becoming rich is a rather straightforward process. Manage your finances, increase your income, and invest the difference. People who have larger incomes have the advantage as long as they don’t succumb to lifestyle inflation.

What separates millionaires from the average person is their assets. Rich people understand they need to buy and build assets which pay them for owning. Eventually, these assets produce enough income to replace a 9-5’s salary.

At some point, you will want to focus on reducing your tax liability. Taxes will be one of your biggest expenses. Find a good accountant who can help reduce tax burdens.

John is the founder of TightFist Finance and an expert in the field of personal finance. John has studied personal finance for over 10 years and has used his knowledge to pay down debt, grow his investment portfolio, and launch a financial based business. He is committed to sharing content related to personal finance based on his experience in his career, investing, and path towards reaching financial independence.