Investing Investing Basics

15 Ways to Build Wealth From Nothing

Here's how to go from rags to riches and build the financial life you want.

By Jenni Sisson

Edited by Eric McWhinnie

Updated Dec. 17, 2024

We’ve all heard the adage, “You have to spend money to make money.” And it makes sense because it’s definitely easier to make money if you have a lot of seed capital.

But is it possible to build your wealth when you don’t have much already? Is it possible to start from almost nothing? The answer is a resounding yes.

Most millionaires (79%) are first-generation rich, meaning they didn’t inherit their money. That’s an indicator you can build wealth, even if you’re starting from the bottom. Here are a few ways to do it.

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Have an abundance mindset

This might sound hokey, but having the right state of mind is key to building wealth.

If you don’t believe you can, you think money is the root of all evil, or you’re not confident in your ability to keep the wealth you generate, it will be a lot tougher for you to reach your financial goals.

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Choose a lucrative field

Play the money-making game where the prizes are bigger. While it isn’t essential, working in a field that pays above average will give you more cash to work with when investing and saving.

White-collar jobs like engineers and attorneys aren’t the only ones to make a lot of money — skilled trades like aircraft mechanics and plumbers can make well over six figures.

Live below your means

Wealth is built in the gap between what you earn and what you spend. The wider you can make this gap, the more space you have to save and invest.

Even if you’re not making a ton of money, if you can keep your expenses low, you may still have enough to build wealth.

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Secret: You don't need thousands of dollars to buy thousand-dollar stocks or create a diverse portfolio.

Robinhood offers a method of investing called “fractional shares.” On its own, one share of a single stock could cost a lot of money, making it difficult to diversify. Robinhood allows you to buy pieces of stock instead, so you have the option to build a diverse portfolio quickly.

Let’s say you want to invest $250, as an example.

With that amount, you could build a relatively diverse portfolio with an investment of $50 in a big tech stock, $50 in a retail stock, $50 in an energy stock, $50 in a manufacturing stock, and $50 in a bank.¹ This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice. To get stock reward, new customers need to sign up, get approved, and link their bank account. Stock rewards shares cannot be sold until 3 trading days after the reward is granted and the cash value of the stock rewards may not be withdrawn for 30 days after the reward is claimed. Stock rewards not claimed within 60 days may expire. See full terms and conditions at <a href="https://robinhood.com/us/en/support/articles/open-account-pick-your-stock/">rbnhd.co/freestock</a>. Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement. Robinhood Gold is offered through Robinhood Financial LLC and is a membership offering premium services available for a fee.

Even better news? Add a Robinhood Gold membership, and you’ll get access to 4.25% (as of 11/15/24) APY² Annual Percentage Yield. Rate valid as of April 12, 2024. To earn interest, a cash balance is needed. If you have a margin balance, there is no cash balance to earn interest. Interest rates for cash sweep and margin investing can change at any time. Fees may reduce interest earnings. on your uninvested cash³ Interest is earned on uninvested cash swept from your brokerage account to partner banks. Partner banks pay interest on your swept cash, minus any fees paid to Robinhood. As of Nov 15, 2023, the Annual Percentage Yield (APY) that you will receive is 1.5%, or 5% for Gold customers. The APY might change at any time at the partner banks' or Robinhood's discretion. Additionally, any fees Robinhood receives may vary and are subject to change. Neither Robinhood Financial LLC nor any of its affiliates are banks. All investments involve risk and loss of principal is possible. Robinhood Financial LLC (member SIPC), is a registered broker dealer. and the ability to buy and sell stocks 24 hours a day, 5 days a week.

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Be willing to diverge from your culture

If you didn’t come from a rich background, it might be difficult to break free of the cultural expectations around money.

Friends and family might expect you to buy things for them. Others in your community might scoff or think you’re too good for them if you change your income level.

If you plan to build wealth, be ready to draw some kind but firm boundaries when it comes to the perceptions and ideas of others about your new economic status.

Get an education

College is expensive, but studies continue to show that those with bachelor’s degrees tend to outearn high school grads by 84%.

If you can find ways to get an education — whether that’s a four-year university degree or a trade school certification — you’ll open up doors to higher-paying jobs than if you only had a high school diploma.

While an education can be expensive, financial aid and loans are available. Just make sure you choose a worthwhile field so you can pay back your loans and build wealth.

Automatically pay yourself first

Take the decision-making out of your savings by setting up an automatic draft on payday to your savings account and/or a retirement account.

By putting savings on autopilot, it will happen month after month without any input from you, and you won’t be as tempted to spend the money. This life hack will build your nest egg even when you aren’t thinking about it.

Grow Your $$: 11 brilliant ways to build wealth after 40

Have a source of reliable income

Getting a job might seem like a no-brainer if you want to build wealth, but having a steady income source makes it easier to plan your expenses and your savings.

If you’re not worried about where your next paycheck is coming from, you can make forward-thinking money moves like automatically contributing to a retirement account or buying things in bulk.

Start a business

By starting a business, you have much more control over how much money your investment can make since you can dictate the time and effort you put in.

An estimated 51% of millionaires are entrepreneurs, so starting a business could be an excellent way to wealth if you have the knowledge and stamina to do it. Some businesses require very little capital to get started.

Insure your assets

One unsung step on anyone’s wealth journey is to not lose what you’ve built. Having proper insurance for your health, life, auto, and home can help prevent a single disaster from wiping you out.

However, beware of overinsuring yourself, as you can overpay on premiums. This will rob you of the growth that money could have made if you’d invested it instead.

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This powerful combination checking + savings account from SoFi® allows you to earn up to a $300 bonus with direct deposit and grow your money with up to 4.00% APY.⁴ New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/2026. Full terms at <a href="http://sofi.com/banking">sofi.com/banking</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members with Direct Deposit can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the 4.00% APY for savings (including Vaults). Members without Direct Deposit will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of Dec. 3, 2024. There is no minimum balance requirement. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a>

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SoFi has no account or overdraft fees⁵ Overdraft Coverage is limited to $50 on debit card purchases only and is an account benefit available to customers with direct deposits of $1,000 or more during the current 30-day Evaluation Period as determined by SoFi Bank, N.A.  The 30-Day Evaluation Period refers to the "Start Date" and "End Date" set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the "30-Day Evaluation Period"). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY.  Members with a prior history of non-repayment of negative balances are ineligible for Overdraft Coverage. and additional FDIC insurance up to $2 million on deposits is available through a seamless network of participating banks.⁶ We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at <a href="http://sofi.com/legal/banking-fees/">sofi.com/legal/banking-fees/</a> ⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/terms">SoFi.com/banking/fdic/terms</a> See list of participating banks at <a href="http://sofi.com/banking/fdic/receivingbanks">SoFi.com/banking/fdic/receivingbanks</a> Plus, you can receive your paycheck up to 2 days early.⁸ Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

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SoFi is a Member, FDIC. ⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/terms">SoFi.com/banking/fdic/terms</a> See list of participating banks at <a href="http://sofi.com/banking/fdic/receivingbanks">SoFi.com/banking/fdic/receivingbanks</a>

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Upgrade your skills

Technology is changing our lives at an ever-increasing pace, so keeping your skills relevant and up-to-date is key. Whether it’s understanding the latest computer programs or training on new regulations, keep educating yourself in your field.

You’ll command a higher salary and open yourself up to more opportunities. YouTube, Coursera, and other sites can be a great place to get started for free.

Diversify your wealth

Once you begin to build wealth, don’t hold all your eggs in one basket. This is a well-known cliche for a reason.

Life got pretty tough for tech investors when the Dot-Com Bubble burst and for real estate investors during the 2008-2009 meltdown.

By having a diverse group of assets, you’ll insulate yourself from a crash in any given area of the market.

Avoid high-interest debt

Nothing drags down your net worth like high-interest consumer debt. If you plan on getting rich, don’t use debt to buy things that lose value, such as cars, clothes, and boats.

The high interest rate means you’ll pay much more for these things in the long run than if you’d saved up and bought them outright.

Supercharge your investments: See what could happen if you add fine art to your investment portfolio

Build multiple income sources

We hear a lot about diversifying our investments, but what about our incomes? Having only one source of income is riskier than having a few streams of income.

Even if you get laid off or fired, you’ll have a few backup income sources. Even if they don’t cover all your expenses, it will cushion the blow of losing your largest paycheck.

Optimize your taxes

While paying taxes is necessary, there’s no reason to give Uncle Sam more than his fair share.

Take all the tax deductions you qualify for and make sure you’re taking steps to reduce your tax burden, such as contributing to tax-optimized retirement accounts, calculating business deductions, charitable contributions, and more.

Maintain an emergency fund

Your rainy day fund won’t earn you a lot of interest, but that’s not its purpose.

An emergency fund protects you from financial stress and having to use high-interest credit cards when your heater goes out or you need an unexpected car repair.

Bottom line

Great wealth isn’t built overnight, but with the right mindset, tools, and effort, you can become wealthy — even if you don’t come from an affluent upbringing.

What you do with your money (savings and investing) is even more important than how much you make.

By disciplining yourself to make smart money moves and start investing, you’ll see your wealth slowly grow over time. With dedication and persistence, you can write your own rags-to-riches success story.

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Invest in Paintings by Basquiat, Picasso, Banksy

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