10 Ways To Build Wealth Fast

·6 min read
Ismailciydem / Getty Images/iStockphoto
Ismailciydem / Getty Images/iStockphoto

Wealth-building is a process that generally takes time. Although the idea of becoming an overnight millionaire is appealing for many, the only real way to get rich overnight is via speculation, an inheritance or a lottery win.

Tips: 6 Ways To Start Building Generational Wealth for Your Family
Worth Checking Out: 12 Realistic Ways To Make Your First $1 Million

Ironically, the best way to build wealth "fast" is to chart out a prudent path toward long-term gains. The quicker you can save and invest, the faster your money will compound, which is the true magic behind building wealth. Here are 10 ways you can grow your net worth as rapidly as possible without taking on undue risk.

Ridofranz / Getty Images/iStockphoto
Ridofranz / Getty Images/iStockphoto

Save

You can't begin any type of wealth-generation plan without having money to invest. As soon as you start drawing an income, make it your top priority to save as much money as you can. One strategy often recommended by advisors is to "pay yourself first," meaning put money in savings immediately when you receive your paycheck, even before you pay your bills. This type of "forced savings" will require you to trim your discretionary spending but will also result in rapidly growing wealth.

Related: The 20 Best Savings Accounts of 2022

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Henglein and Steets / Getty Images

Buy an S&P 500 Index Fund

The S&P 500 index doesn't guarantee profits, but it's proven itself time and time again to be a tremendous generator of long-term wealth. In fact, most investors are surprised to learn that the "risky" stock market has never lost money over any 20-year rolling period. And yet, the long-term average return of the S&P 500 is north of 10%. This means the S&P 500 index has a tremendous risk/reward profile over the long run. Even legendary investor Warren Buffett, the "Oracle of Omaha" himself, has directed his trustee to keep 90% of his money in an S&P 500 index fund after he passes.

See: 11 Ways Warren Buffet Lives Frugally

360b / Shutterstock.com
360b / Shutterstock.com

Buy Dividend-Paying Stocks

Dividend-paying stocks may seem like a slow and boring way to build wealth, but they are one of the best ways to tap into a solid and growing source of income, and capital gains as well. The so-called "Dividend Aristocrats" are large, well-known companies in the S&P 500 index, like Coca-Cola and McDonald's, that have raised their dividends for at least 25 years in a row. This means that those who bought these companies 25 years ago are earning huge effective yields on their original investment amount. Combined with the potential for capital gains, the Dividend Aristocrats can be a great way to build wealth.

See: GOBankingRates' Best Online Banks of 2022

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monkeybusinessimages / iStock.com

Buy a Rental Property

One of the key ways to build wealth fast -- and over the long term -- is to earn passive income. And one of the best ways to generate passive income is to own one (or several) rental properties. With a well-managed rental property, you'll receive a steady stream of income every month, with little additional effort required on your part. While you'll have to find tenants to move in and will have to deal with occasional maintenance issues, your income will essentially be on auto pilot. Unlike your mortgage payment, your rents will continue to rise over time, meaning your tenants will be paying some or all of your mortgage while you watch your properties appreciate in value.

Learn: 8 Insider Tips To Get Rich in Real Estate

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Shutterstock.com

Keep Asking for Raises

The cost of living goes up nearly every year, and so does your experience and value to your company. As such, you shouldn't be afraid to ask for regular raises, both to keep up with the cost of inflation and to be paid what you're truly worth. This doesn't mean you should constantly pester your boss about getting paid more, but you should also make the case, when appropriate, that your value should be reflected in your salary. Those who fail to ask for raises tend not to get them, so don't overlook this source of building your wealth.

Read More: 12 Crucial Money Tips for Every Phase of Your Financial Life

monkeybusinessimages / Getty Images/iStockphoto
monkeybusinessimages / Getty Images/iStockphoto

Start a Business

Most of the world's billionaires either inherited their money -- which isn't as much of a strategy as simple good fortune -- or started their own businesses. If you're looking to generate a large amount of wealth, starting and growing a successful company is one of the most likely paths. Of course, entrepreneurship is a risky proposition, as many new companies fail in just the first few years. But if you can create a solid business idea, raise the appropriate funding and get the right people working for you, this high-risk, high-reward path can pave the way to a lifetime of wealth.

Check Out: McDonald's and 19 Other Franchises That Could Make You Rich

Xavier Arnau / Getty Images
Xavier Arnau / Getty Images

Broaden Your Education and Skill Set

If you're going to spend your life working for others, you'll have to make yourself as valuable as possible if you want to generate the most wealth. Educating yourself in a wide variety of fields and developing a diverse skill set are some of the best ways to demonstrate your value as an employee. Focus on specialized skill sets that are in high demand, such as those in the high-paying tech and financial industries, to give yourself the best opportunity to grow your wealth rapidly.

Important: 25 Things You Should Never Do With Your Money

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Shutterstock.com

Set Up Multiple Streams of Income

It's hard to generate sizable wealth on a single salary, even if you save a large portion of it. To build wealth fast, set up multiple streams of income. For example, in addition to your day job, pick up a side hustle that matches your talents and abilities. If you're a freelancer, try to find additional clients in a variety of different industries. Not only will this bring you additional income, it will also help protect you during economic downturns if you happen to lose one of your sources of income.

Related: The 7 Best Side Hustles to Pursue

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Carlos Horta / Shutterstock.com

Live Within Your Means

You'll never generate any wealth at all if you spend more than you earn. To set yourself up for a lifetime of prosperity, it's important to create a strict budget and stick to it. Make sure that in addition to all of your unavoidable expenses, you've got a significant line item for saving and investments. Every month that you can come in under budget, you're adding to your pool of lifetime wealth.

Options: 16 Effective Ways To Trick Yourself Into Saving Money

JaredAlden / Getty Images/iStockphoto
JaredAlden / Getty Images/iStockphoto

Don't Be Too Conservative

Although being too speculative is a sure-fire way to risk all the savings you've worked for, being too conservative can be equally damaging in terms of limiting your wealth. Taking some risks in your financial life -- from investing a bit more aggressively to starting your own business -- is a necessary component if you want to generate outsized levels of wealth. If you put all of your money into Treasury bills, for example, you'll actually generate a negative real return after taking taxes and inflation into account. Owning some stocks, real estate, your own business or even some cryptocurrency are ways to gain exposure to higher potential returns on your investments. Just understand that while speculation has a role in generating wealth, it also brings additional risk to the table.

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