“You have too many streaming subscriptions.”
“Brew your own coffee.”
“Stop buying avocado toast, for goodness’ sake!”
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Do these sound familiar? I bet they do. Nowadays, you can’t listen to a podcast or have a chat with a neighbor without getting hit with some sort of “financial advice” that’s supposed to make you filthy rich overnight.
But skipping lattes won’t turn you into a millionaire.
Kiplinger’s Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.
We’re living during a time when it’s easy to live beyond your means, but long-term financial success doesn’t come from savings alone.
Once you figure out your spending habits, you must learn how to create systems that make money even when you’re not looking.
I talked with a few successful professionals and compiled a list of tips and proven strategies that actually put you on the path to wealth.
But first, let’s see why budgeting is not the answer.
Why budget hacks don’t work
Budget hacks are the financial equivalent of fad diets. They promise quick results with minimal effort — cut out this, trim that and, voilà, you’re suddenly wealthy.
Except it never works that way.
Take coffee, the internet’s favorite scapegoat. The average American spends about $4.50 a day on a caffeine fix, which adds up to roughly $1,642 a year. That’s not nothing, and maybe you could find a better use for this money, but in the grand scheme of wealth building, it’s pocket change.
Even if you invested every single latte dollar, it would take decades before that sacrifice moved the needle in any meaningful way.
The bigger issue is that being focused on tracking every penny tricks your brain into thinking you’re making progress.
Meanwhile, you’re ignoring the financial moves that really create wealth but are more complex and difficult to make, such as growing your income, investing consistently and owning assets that appreciate over time.
It’s a bit like rearranging your desk while ignoring the fact that your entire office is on fire. You look productive, but the real problem remains unsolved.
That’s not to say small savings don’t matter. They can give you breathing room in your budget. But hacks alone won’t build a secure financial future.
Five tips to put you on track to building wealth
A small disclaimer: These are not the only successful methods, and you don’t have to apply them all. My goal here is to give you a better understanding of what it takes to start the engines of wealth-building.
Let’s get started:
1. Income growth over penny-pinching.
You can budget your way to an extra few hundred dollars a year, but it’s small potatoes compared with the power of growing your income and keeping spending low.
Let’s say you manage to negotiate a 5% raise on a $70,000 salary. This instantly adds $3,500 every year. Factor in future raises, bonuses or retirement contributions that come with that higher salary, and it’s easy to see why the impact is bigger than cutting Netflix out of your life.
The key is to treat your career or business as your biggest asset.
- Upskill
- Network
- Ask for a raise
- Explore side hustles for extra income
If you can’t get a raise from your current employer, it might be time to look for a new one. According to a study by Side Hustles, job switching is a good strategy to increase your income by up to 35% over three years.
Still, make sure to do your research, as it might not work in all industries.
2. Invest early and consistently.
Many people avoid investing because it feels intimidating and risky. Short-term market fluctuations are scary compared to the apparent safety of savings. It’s easier to deposit money into an account (you can do it automatically) than to do the research needed to become an investor.
Still, when you do the math, investing, especially if you start early and are consistent, is the way to build wealth.
If you start investing at age 25, saving $500 a month with a modest 7% annual return, you’ll have more than $1.2 million by age 65. Wait until 35 to start, and you’ll retire with less than half that (around $567,000). In this case, time is money, quite literally.
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As Anna Zhang, head of marketing at U7BUY, put it, “Just like gaming, investing requires strategy, patience, and learning from mistakes. Through our platform, we get front-row seats to how players use in-game economies to practice timing trades and managing resources. These are priceless skills everyone trying to build wealth needs.”
3. Build assets.
Assets are things that appreciate in value or generate income. Unlike money sitting in a savings account earning 0.5% interest, these assets can compound, produce dividends and increase in value.
Classic assets are real estate, stocks, bonds, mutual funds, businesses and so on. These usually require a hefty initial investment, which makes them inaccessible to beginners. Luckily, due to technology and artificial intelligence (AI), things are changing.
Leigh McKenzie, community advocate at Traffic Think Tank, said, “Wealth isn’t just about stocks or real estate anymore. There’s a wide variety of assets you can build, from digital products to income-generating websites.
“At Traffic Think Tank, for example, we teach people how to create passive income web properties, which are digital assets that keep working for you long after the initial effort.”
Michael Melen, co-founder of SmartSites, added, “A strong brand and a good reputation are some of the most valuable assets you can own. They open doors, attract opportunities and compound in value just like financial investments. When people trust your name, wealth tends to follow.”
4. Use debt as a strategy.
Debt sounds scary, but only if you don’t know how to use it to your advantage. When you borrow from a place of wisdom, you use other people’s money to create more value than you could with your own money.
This might mean:
The key to using debt as a tool for wealth is discipline. You must understand the terms, plan your repayments and make sure the debt is working for you, not against you.
I learned more about this from Adrian Lorga, the founder and president at Stairhopper Movers, who said, “When I started the company, I used debt as an instrument for growth. This allowed me to invest in more trucks, hire more people, and scale faster than if I had waited to save every dollar. The right kind of debt, managed wisely, can be the catalyst that pushes your business to the next level.”
5. Automate financial discipline.
As Atomic Habits author James Clear famously said, “You do not rise to the level of your goals. You fall to the level of your systems.”
This means that to get in control of your money and start building wealth, you need good systems — more specifically, automated systems.
Set automatic contributions to your 401(k), recurring transfers to an investment account and scheduled payments for bills to make financial discipline effortless.
If you rely on willpower, you’ll either forget or succumb to the temptation to skip a transfer or delay investing in favor of a fancy vacation or a shiny object you don’t really need.
Make sure your system moves the money to the right places the moment they reach your account. This way, you only see what’s available after everything has been covered.
In conclusion
The path to building wealth is paved with smart decisions, good systems, consistency and discipline.
Start small and let it gain momentum. Wealth isn’t built overnight, but every deliberate step compounds over time.
Your future self will thank you for starting today.
