Wealth Building Principles When You Don't Come From Money

Many wealthy individuals were not born rich; they learned how to build wealth from nothing. There’s no doubt that inheriting wealth can help build more wealth. But it’s entirely possible for someone who doesn’t come from a wealthy background to join the ranks of the affluent. Accumulating significant wealth without the benefit of coming from money will likely take some time, but with effort, discipline and careful planning, they can make strides toward becoming one of the financial elite.

Don’t let your current financial circumstances hold you back. Reach out to a financial advisor to explore how you can start building wealth, no matter where you’re starting from.

1. Learn About Money

Building wealth is a skill that rests on financial literacy. Financial literacy can be acquired through formal education, reading books and blogs, and consuming investment news. Joining communities of people interested in various wealth-related subjects, such as real estate investing or buying stocks, is another way to gain financial literacy.

Becoming wealthy isn’t only an intellectual exercise. Someone’s emotional relationship with money can sometimes be more important than their knowledge. To that end, it’s necessary for someone who starts with little and wants to end up with a lot to decide how much that matters to them. If it’s more important to keep up with the Joneses and live a lifestyle that looks expensive, it’ll probably be harder to accumulate significant wealth.

2. Generate Income

Relatively few people become wealthy strictly by earning large amounts of income in the form of wages, salaries and other employment-related compensation. But for almost anyone, it’s necessary to generate some income, usually through paid work, in order to have money to save and invest. Thus a key part of becoming wealthy is to earn as much income as possible.

Generally speaking, getting a college degree is a reliable way to earn more money. The median salary for a recent graduate with a bachelor’s degree is $60,000, according to a report by the New York Federal Reserve, while a typical high school graduate earns $36,000.

Education Data Initiative reports that the median lifetime return on investment for a bachelor’s degree is 287.7% of the cost of the degree. However, it takes 15 years of full-time work to achieve a positive return on investment (ROI) from a bachelor’s degree. A two-year associates degree costs less, takes less time and produces a positive return much more quickly, as well as a much larger lifetime ROI.

Other ways to boost earnings include building skills through professional training and certification, seeking promotions, changing jobs in search of better pay, periodically requesting a raise and working overtime.

Starting a small business is another way to increase earnings. Selling digital products such as e-books, blogging, affiliate marketing and drop shipping products can also generate passive income.

3. Start Saving

A young investor reviewing how to build wealth from nothing.

Saving money is key to building wealth. Many advisors suggest starting by creating an emergency fund of $1,000, then expanding that until it amounts to three to six months’ worth of basic expenses. If you’re having trouble prioritizing savings, making automatic contributions can help. It can also be a good idea to max out retirement savings, contributing the maximum allowed to tax-advantaged retirement plans and taking full advantage of employer matches on workplace plans.

It can be tough to find money to save on a limited income. However, it’s usually possible to save 20% of income even for many low earners. Try making a plan with your estimated income and expenses for a defined period of time – in other words, a budget. A budget can help identify ways to live more frugally, which can free up money for saving. Examples of ways to cut expenses include driving used vehicles bought with cash and cooking meals instead of dining out.

4. Borrow Carefully

With the exception of a mortgage, which is likely necessary to be able to buy a home, wealth-builders typically avoid debt. In particular, carrying balances on high-interest credit cards should be avoided. Auto loans and personal loans aren’t helpful either when it comes to building wealth.

It’s usually better to save cash so vehicles, vacations and other expenses can be handled without needing to borrow or go into debt. If debt already exists, debt-reduction programs such as the snowball method have helped many people become debt-free on the way to accumulating significant wealth.

5. Manage Risk

Managing risks is another way to build wealth. This can be done by having appropriate insurance as well as self-insuring by, for instance, having emergency funds available to handle the unexpected. Health insurance is particularly important, given that medical bills represent a leading cause of personal bankruptcy. Life, disability, long-term care and liability insurance are also part of most well-thought out personal risk management plans.

Another way to manage risk is through diversification. This can mean diversifying income streams by adding passive income to your wages and salary from work. It can also mean diversifying investments. A sustainable approach to accumulating wealth involves generating real value through productive work and effective investments over time. Just be careful to avoid get-rich-quick schemes that promise rewards without effort.

6. Invest Early and Wisely

Any wealth building plan involves using money’s power to earn more money through investing. Beginner investors often start with exchange-traded funds and mutual funds that are passively managed, charge low fees and track large market indexes.

These types of investments offer investors an opportunity to learn about investing with moderate-risk, high-diversification prospects for at least average returns. To learn more about investing, consider talking to a financial advisor.

7. Increase Your Earning Power

Boosting your earning power is one of the most effective ways to build wealth when you don’t come from money. While cutting expenses and budgeting help, there’s a limit to how much you can save, but your potential to earn more is far less capped. Pursuing additional education, certifications or specialized training can open doors to higher-paying roles and long-term career growth. Even small steps, like improving your negotiation skills or seeking out leadership opportunities, can meaningfully increase your income over time.

Expanding your earning power isn’t limited to your primary job, either. Many people build skills through side hustles, freelancing or entrepreneurial projects that eventually become significant income streams. Diversifying how you earn not only increases your financial stability but also helps you grow professionally in ways that employers value.

8. Protect What You Build

As your wealth grows, safeguarding it becomes just as important as accumulating it. Building financial stability takes time, and a single unexpected event, such as a medical emergency, job loss or major home repair, can quickly undo years of progress. Having the right insurance coverage, including health, disability, renters or homeowners insurance, creates a safety net that shields you from financial setbacks. An emergency fund offers another layer of protection, giving you cash on hand to manage surprise expenses without relying on high-interest debt.

Protecting what you build also means staying alert to risks like identity theft, fraud and predatory financial products. Monitoring your credit, using secure financial tools and working with trustworthy professionals can help you avoid costly mistakes.

Bottom Line

It is possible to build wealth from nothing, but it rarely happens without a solid plan and disciplined attention.

It’s entirely possible to become wealthy from modest beginnings, but it rarely happens without a solid plan and disciplined attention. Accumulating wealth follows a series of steps that starts with acquiring financial literacy, includes maximizing earning potential through work, learning about budgeting, saving strenuously, avoiding debt, and managing risk on the way to building an investment portfolio that enables sustainable wealth capable of lasting a lifetime.

Wealth-Building Tips

Take the first step toward financial freedom by scheduling a consultation with a financial advisor who can help tailor a wealth-building strategy to your unique situation and goals. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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