Build Wealth

How to build wealth from nothing: 4 financial strategies

Before I started writing about business and finance, I worked as an investment advisor for about eight years. In that time I met thousands of people, each with their own goals and circumstances. I helped my clients choose investments and account types, manage their wealth, prepare for retirement, and transfer wealth to the next generation.

In the time I spent working in finance, I learned about hundreds of investments and strategies.

The vast majority of the strategies and philosophies that I witnessed were designed to make money for advisors. The goals of people investing their hard-earned money almost ALWAYS took a backseat.


However, during that time I met a number of people who had managed to build real wealth and achieve financial independence. These were the ones I paid extra attention to—I’ve even used some of their strategies myself.

While any one of these methods can help you on your path to financial independence, they only work if you use them and stick with them. None of them are easy. Each of these strategies will test your patience and resolve; but, used properly, any of them can help you to live the life you want.

Table of Contents

Get our wealth building guides:

How to invest in real estate

How to invest in index funds

Find a side hustle for financial independence

How to start a business

The Motivation for FI/RE

Before we map out some of the wealth-building strategies that can help you achieve FI/RE, it’s worth discussing why people decide to pursue this path.

Becoming financially independent is a journey; not an event. Nobody wakes up one day to realize that they’ve achieved financial independence by accident, nor does anyone who achieves independence earn the ability to blow up their budget and start living like an eccentric billionaire. People don’t pursue FI/RE to become wealthy. They don’t pursue it so they can live in the Hollywood Hills, own a collection of luxury cars, or take trips to Bermuda via private jets.

People pursue financial independence to live independent, autonomous lives. This is a lifestyle that must be lived—not just attained. People strive for this life so that other people won’t have claims against their time. After all, time is our most precious resource. It is the one thing that, once spent, is gone forever.

Desperate Times

Man worried about his finances

The past 20 - 25 years have been rocky times in American history. Millions of Americans have come of age through a period of multiple, severe recessions. We’ve watched parents, grandparents, aunts, and uncles who worked their entire lives lose everything due to no fault of their own.

We’ve seen others who spent their whole lives working toward rewards that—no offense—kind of suck. As a result, there are thousands of us who have decided that trading a lifetime for a McMansion isn’t acceptable.

Instead, people are looking for ways to regain their independence or retire early. Some are willing to keep working once they reach financial independence, but not in traditional 9 - 5 jobs, and often not in an office.

Those of us who want to become financially independent can use one or more wealth-building strategies to help get there. The goal for each of these strategies is to help build wealth and/or income outside of traditional employment. This can help you increase your savings rate or become less dependent on full-time work.

Many people have used these strategies to achieve financial independence and reclaim agency over their lives. They’ve managed to regain the freedom to go where they want, do what they want, and work when they want.

Choosing a Wealth Building Strategy

To decide which strategy is right for you, be sure to consider several factors about the strategy itself, your lifestyle, and tolerance for risk. Some things to consider:

  • Cost of entry (the need for upfront capital or credit)
  • Physical limitations (you may need to stay in a certain place)
  • Technical skills (dropping-shipping is hard if you don’t have a working knowledge of several online tools and plug-ins)
  • Risk aversion (market fluctuations or safety concerns for activities like driving for Uber/Lyft)
  • Timetable (how long do you have to build wealth/income)
  • Return On Investment preferences (higher yield = higher risk)
  • Costs you’re willing to cover
  • Willingness to be hands-on

Four wealth-building strategies that can help you reach FI/RE:

Investing in Real Estate

Investing in real estate is one of the most popular (and reliable) strategies for building independent wealth. There are many subsets within this strategy (rental property, fix-and-flip, commercial property, development/redevelopment) });, but for this article, we’re going to focus on residential rental property.


Residential rental property is great compared to other forms of real estate investing because: 1. It has the lowest barriers to entry, and 2. It is the most common real estate strategy used by investors to achieve financial independence.

Investing in real estate is not as complicated as it seems. All you’re trying to do is buy properties (homes, apartments, condos, etc) that you can rent out to tenants. Your goal is to earn more in rent than you pay in mortgage, taxes, insurance, and upkeep.

There are some unique benefits to this strategy. For example, investing in real estate typically gets favorable tax treatment. Taxes on your rental properties and interest paid on any mortgages are both tax deductible, as are maintenance costs. Some investors even use depreciation, or an asset’s decrease in value, to speed up their tax savings. However, investors can still benefit from this form of investment without resorting to complicated tax strategies.

The Drawbacks of Real Estate

For all its benefits, rental property investing can also have its share of disadvantages. For example, there is a cost of entry for real estate investing (in the form of down payments) that can be an issue for some investors. Being a landlord can also require you to be close to your rentals to take care of maintenance and tenant turnover.

While tenants and property maintenance can cause issues, there are ways to get around these struggles. For example, third-party apps like Avail or TaskRabbit can help with property management and maintenance, and reduce many of the headaches involved with owning property.

Overall, investing in real estate is a great method for building wealth to achieve financial independence. It’s a bit more hands-on than some other strategies (like passive investing, which we’ll cover next), but the returns are also higher. These higher returns - and the potential for regular, passive income - make real estate an ideal path to financial independence.

Passive Investing in ETFs or Mutual Funds

If, after reading the section above, you think real estate investing is simpler than you thought, this one will really blow your mind. Passive investing offers you the opportunity to build wealth without having to arrange financing, maintaining property, or dealing with tenants.


Everyone knows about the stock market. But, when we hear the words “stock market,” visions of day-traders and hedge fund billionaires dance in our heads. Or maybe flashbacks to the collapse of Bear Stearns, or the near-implosion of the US financial system. But don’t let the acronym-heavy terminology fool you. In fact, here are just a couple definitions you need to see how simple these systems really are:

  1. What is a Mutual Fund: A mutual fund is a bundle of dozens of individual stocks and bonds that investors can buy into. These funds are overseen by managers and they allow you to invest in one place, while spreading your investment over lots of individual stocks. These funds can only be bought and sold at the end of each day, which is more limited than the traditional stock market.

  2. What is an Exchange-Traded Fund (ETF): An ETF, also known as an index fund, is like a mutual fund that trades just like a stock. While mutual funds can only be bought and sold at the end of each day, shares in ETFs can be traded at any time throughout the day.

Investing in mutual funds and ETFs is one of the most common ways to achieve financial independence. It’s easy to invest large portions of your income in index funds. Plus, these funds charge almost no management fees and typically don’t involve trading commissions. You can then watch the value of your investments rise over time without having to worry too much about the day-to-day shifts of the stock market.

The Benefits of Diversified Funds

Diversified stocks

The goal of these index funds is to serve as a low-cost way to own dozens or thousands of individual stocks. These funds are not managed actively. In other words, there’s no manager trying to figure out what risk he can take with your money to earn himself an multi-million-dollar bonus.

Instead, these funds are designed to save you loads of money on fees over the long-term, and provide a way to invest just a few dollars in a TON of holdings all at once. That way you don’t need to worry as much about losing money in any one stock. The standard stock investment model increases and decreases in value at a moment’s notice, but funds allows you to  avoid short-term losses. By investing in funds that are spread out across many stocks, your investment will feel more stable.

The way this strategy works is that an investor, aka YOU, chooses a low-cost index fund that they want to use (VTSAX, VTSMX, and VSLIX are all popular choices). Then, they invest in the fund(s) of their choice. Then they invest again, and again, and again, and again.

The underlying goal for this strategy is to consistently invest as much of your income as possible in low-cost funds for years. You should never trade your account or take money out — you should only add to your account. As much as you can, as often as you can.

Weathering the Storms

Under this strategy, investors should keep investing even when the stock market declines. In fact, when the market falls, investors should be happy because it allows them to buy more shares for every dollar they invest. This is called dollar-cost averaging, and it’s awesome.

Dollar-cost averaging allows you to take advantage of times when the market falls because it lowers the average price you pay for shares. By investing the same amount that you normally do, lower share prices allow you to buy more shares for the same amount of money, lowering your average cost per share.

Unlike real estate investing or some other strategies, passive index investing has almost no barriers to entry. Here’s how you can start right now: investors need to qualify to purchase shares in the fund(s) they want to use (typically this means being a US citizen) and meet minimum investment criteria (usually a few hundred to a few thousand dollars). Other than those few requirements, anyone can get started in the time it takes to fill out a form online.

The key to index investing is the same thing that makes it difficult - you must consistently save as much of your income as possible. To use this strategy to achieve financial independence, this means saving at least 20% - 70% of your income, much more than the 3% - 5% that many employers match for 401(k) contributions.

Side Hustles

Many people think of side-hustling and starting a business as the same thing. In practice, however, these 2 practices are quite distinct.

If you start a business, your ultimate goal will likely be to build a company that can sustain you and your lifestyle. You’ll probably need to incorporate and you may need to buy insurance, in addition to whatever tools or equipment you need to run your business.

Side hustles, on the other hand, are typically project-oriented. They aren’t designed to be full-time endeavors. Instead, the goal is to develop a niche around one or a couple of core products or services where you can benefit clients and make extra money in your spare time.

Unless you’ve been living under a rock for the past 6 years, you’re probably aware of some of the platforms that are available for people to make extra money online in the gig economy. While Uber and Lyft are two that always come to mind, ride-sharing apps barely scratch the surface for people to use their skills or resources to make extra money on small projects.

Side hustles for financial independence

Here are just a few of the platforms that you can use to build income outside a job:

  • Upwork
  • Fiverr
  • Clearvoice
  • Contently
  • 99Designs
  • TaskRabbit
  • Uber/Lyft

Some of these platforms require special skills or tools for gigs such as graphic design work. Jobs on other platforms may require you to know about Excel or Wordpress. For some, you just need to be a good writer or have a car and a valid driver’s license.

Regardless of your skills or resources, chances are there’s a platform out there where you can generate income. The goal of this strategy is to generate income outside of traditional employment - preferably income that you can make on your own schedule and without being tied to one location.

What to Do With Your Earnings From Your Side Hustle

Man with a handful of money

When you start making money through one or more side hustle or gig platforms, try to save as much of your income as possible. Save it using one of the other strategies discussed in this article (buying rental property or investing in index funds, for example).

But mainly, focus on building up income from those side gigs, so that eventually you can support yourself without a full-time job. Reaching that point is financial independence at its simplest. After you’ve hit the minimum for financial independence, you’ll have the flexibility to go where you want and do what you want, and your income will travel with you.

Entrepreneurial Options

The three options listed above for building wealth or income in pursuit of FI/RE may seem like a limited set of options. Or they may seem similar to a path you’ve contemplated. In reality, there are tons of ways to build wealth or income to achieve financial independence.

How to be an entrepreneur: achieve FI/RE by being your own boss

If you can’t come up with a strategy that works for you, you may just need to think more broadly. Here are just a few ideas:

  • Contract legal work
  • Freelance design services
  • Drop-shipping
  • Weekend lawn care
  • AirBnB management
  • Small engine repair service
  • Web designer

So, our fourth and final strategy (for now) for achieving FI/RE is this: attempt the unconventional. Start your own business. Buy a business. Sell a business. Everywhere a business, business.

If you want to start building wealth or income to hit your FI number, retire early, or even just become less reliant on traditional employment, you may need to think outside the box. If you have advanced education or special training, consider teaching courses online. Are you an attorney? Consider doing some extra work for friends and family on nights and weekends. Maybe consider leaving that 90+ hour-per-week associate job and start your own small practice that you can run from anywhere as a nomad.

Do It All Online

There has never been an easier time to start a business than right now. In the modern age, you can start, fund, build, scale, and exit a business all from your living room. Need to file an LLC? There are services that can do that for you (like LegalZoom or RocketLawyer) for a modest fee. Want to raise money? Kickstarter can help get you going.

The only obstacle to success in starting an online business is whether or not you’re willing to dedicate the time it takes.

By now, most of us know someone who has started and built a successful online business. We can find more cases by browsing Instagram, YouTube, or other platforms. Think it’s beyond your skill level? Think again. The only obstacle to success in starting an online business is whether or not you’re willing to dedicate the time it takes.

So, if you want to become financially independent and none of the other strategies for building wealth sound right for you, don’t stress. Spend a little time thinking through your own education, skills, and experience. Figure out what you can do online that people will pay you for. If you have friends or family with shared interests, consider starting a venture with them so you can support one-another in your endeavor.

Leave a Legacy

Family walking together

One of the great benefits of starting your own business — especially a family business — is that the rewards don’t stop with you. Using this method, you can achieve financial independence and create something that helps your family for generations.  

When you build a business, you have something to hand down to your children and grandchildren, each of whom can enjoy the financial independence that you worked so hard to achieve.

Revenue vs. Savings Needs

People often think that becoming financially independent requires a massive bank account. While this process does require saving large parts of your income, success more often hinges on right-sizing your expenses.

Achieving financial independence requires meeting savings goals that are based almost entirely on household expenses - because that’s what you have to cover in order to BE financially independent.

I’ll give you an example.

Right now my wife and I have a small mortgage on our house, 2 car payments, and some outstanding student loans. When we include estimates for utilities, taxes, insurance, groceries, and entertainment, our expenses total about $4,500/month, or $54,000/year.

A common rule to follow in FI/RE community is that you need about 25x your annual expenses in order to be financially independent. In our case, that’d be $1.35 million, which we’ll just say is a little ways off.

However, let’s see how our needs (and our ability to reach financial independence) would change if we had all our debt paid off.

If we paid off our small mortgage, remaining student loans, and cars, our estimated expenses would only be about $1,900/month, or $22,800 per year. Using the rule of 25, that would mean we’d need about $570,000 in savings to achieve financial independence - a far easier number to achieve.

So, without earning an extra dollar - just by paying off debt - we will have cut the amount we need to retire by nearly 60%.

Figure Out Your FI Number

Tips for Picking or Implementing a Strategy

If you want to get on the path to FI/RE, it’s important to learn from the experiences of experts and people who have tried it before. We gathered tips and tricks from investors, entrepreneurs, and FI/RE aficionados that can help get you started.

Know Your Strengths


Play to your strengths by researching a niche that you know well and enjoy. When you create in a space that is in your existing wheelhouse you can put in longer hours without it feeling like work.”

- Bryan Gardner, Co-creator of Fly Pedals and Founder of Coopt
- Bryan Gardner, Co-creator of Fly Pedals and Founder of Coopt

Be Prepared to Use Debt for Some Strategies


“Real estate is a great way to build wealth and provide income to live on.  Real Estate investing is not a get rich quick scheme.  However, over time real estate investing pays off!  We chose to purchase several homes and then we started paying them off as fast as possible.  We will typically pay off a 30 year mortgage in 7 years.”

- John Myers, Real Estate Investor & Owner-broker of Myers & Myers Real Estate
- John Myers, Real Estate Investor & Owner-broker of Myers & Myers Real Estate

Embrace Multiple Strategies


“I have two strategies that have paid off big-time. The first is getting my own clients to work with. As a technology and digital marketing consultant, companies are willing to pay good money to get help. Getting hired by small-businesses for fixed monthly retainers helped me get additional monthly paychecks. The second is starting my own blog that I monetized with ads. Before I sold it, it was generating several thousand dollars a month on auto-pilot. I worked hard on it for several months and I had to learn a lot to create it, but it really paid off.”

 - Colin Ma, Technical Architect and FI/RE-pursuer
- Colin Ma, Technical Architect and FI/RE-pursuer

Consider Your Own Limitations


“The main factors to consider when choosing [a strategy] are: how much capital do you have to invest, how much time and labor can you invest, do you want to work in a business or on a business, and can you work for a boss. Whichever strategy you choose, it will require an investment of capital, time/labor, or both. It's important to consider which of these you have and are willing to invest, and how much / how consistently you can do so. Thinking hard about your capabilities in this regard will help you utilize your time and resources more effectively to help you achieve financial independence.”

- Andrew Chen, Founder of Hack Your Wealth
- Andrew Chen, Founder of Hack Your Wealth

Form a Business for Tax Benefits


“Anyone who asks me how to build wealth, I suggest the FIRST thing they do is start a business.  Starting a business instantly qualifies you for over 400 tax deductions you don't get if you only have a W-2 income.  Just by lowering your taxes you're raising your income.  You also learn valuable skills like marketing and sales that will help you increase your value output to the world and your income to the bank account.”

 Adam Doran, Prevail Innovative Wealth Strategies
- Adam Doran, Prevail Innovative Wealth Strategies 

You Can Invest Time Instead of Money


“Investing your money is just one way to grow your wealth. If you are entrepreneurial and want to create a new stream of income outside your day job, you can consider starting an online business. There are many types of legitimate online businesses. To build a profitable online business, you need to sell either products or services online for a profit."

- Gladice Gong, Personal Finance Blogger, Earn More Live Freely
- Gladice Gong, Personal Finance Blogger, Earn More Live Freely

Look for the Big Upside


“The best way to build wealth as quickly as possible is by finding cheap opportunities that have a realistic potential to pay off exponentially. Internet businesses are one of the best ways to do this. After all, there’s a reason so many FIRE authors are also internet-business owners. The economics just make sense...because they leverage low-cost capital requirements into potential exponential returns. When dealing with online-business economics, you can afford to miss the mark several times in a row while still landing a lucrative business.”

- Shaun Connell, Founder, Learn Financial Strategy
- Shaun Connell, Founder, Learn Financial Strategy

Avoid Debt


“If you're committing to FI/RE, you need to avoid debt. Debt is going to take away from your income and tack interest on top of it. You might need some debt to improve credit scores, but only take the minimum you need and pay off the full balance monthly.”

- Chane Steiner, CEO of Crediful
- Chane Steiner, CEO of Crediful

Additional Reading

Your Money or Your Life - Vicki Robin

This book is a common denominator among recommended reading lists for most FI/RE blogs. It addresses financial independence head-on and relates real-world stories from others who took control of their finances to reclaim their independence.

Rich Dad, Poor Dad - Robert T. Kiyosaki

This book is a mainstay for anyone who wants to build independent wealth. It teaches, among other things, the true meaning of assets and liabilities and the importance of building cashflow.

The Millionaire Next Door - Thomas J. Stanley

This book is based on an incredible study conducted of hundreds of millionaires. It disproves many notions that people have about how millionaires live and what drives them.

The 4-Hour Workweek - Timothy Ferriss

Tim Ferriss’s career as a guru was launched by this book, and it’s still considered seminal reading by would-be digital nomads.

Think and Grow Rich - Napoleon Hill

An oldie but a goodie, this book puts into words many things that people know intuitively about working hard for what they want. It’s a little bit of a heavier read, as it’s now about a century old, but millionaires and billionaires swear by it.

The Man Who Quit Money - Mark Sundeen

This book is a bit more non-traditional, and doesn’t have to do with FI/RE per se, but it’s great reading and tells an incredible story of one man who decided to live his life without money.

Bottom Line

For many, FI/RE can seem like little more than a pipe dream, but thousands have found it a way to right-size their lifestyles and reclaim their independence. We often hear that people can either work to live or live to work, but FI/RE offers an opportunity to do neither. Those who achieve financial independence have the opportunity to just live. And sometimes work. If they want.

If you want the freedom to work when you want, where you want, and how you want, consider setting yourself on the path to financial independence. Reassess your household budget and start thinking about which strategies may work for you. And check back soon for more tips, tricks, and resources, as we continue to explore these and other strategies that work, and hear from others who have found success in their search for FI/RE.


How does investing in real estate contribute to financial independence?

  • Answer: Investing in real estate involves buying properties and earning income through rent. The strategy capitalizes on favorable tax treatment and provides potential for regular, passive income, making it a viable path towards financial independence.

What is passive investing, and why is it considered a common way to achieve financial independence?

  • Answer: Passive investing, through ETFs or mutual funds, allows individuals to invest in a diversified portfolio with low management fees. This strategy emphasizes consistent savings and benefits from dollar-cost averaging, making it an accessible and effective approach to build wealth for financial independence.

How can side hustles contribute to financial independence, and what are some popular platforms for such endeavors?

  • Answer: Side hustles, typically project-oriented, help individuals generate additional income outside traditional employment. Platforms like Upwork, Fiverr, and TaskRabbit provide opportunities to leverage skills and resources for extra earnings, fostering financial independence through diversified income streams.

Why consider entrepreneurial options for achieving financial independence?

  • Answer: Entrepreneurial options, including starting a business or exploring unconventional paths, offer diverse opportunities for income generation. Whether through freelance services, drop-shipping, or online ventures, these approaches provide flexibility and can be initiated with relatively low barriers to entry, making them potential avenues for financial independence.

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