Here Is How To Get Rich Through Your Job

Get rich through your job.

You can get rich through a normal job by getting promoted, living with low expenses, and investing in compounding assets for as long as possible.

Reference Disclaimer: Not Financial Advice

The Meaning Of Rich Matters

A beautiful island to be seen.

For many, being rich implies having an abundance of resources and assets. It means having the financial freedom to pursue your passions, travels to captivating destinations, and indulge in luxuries. 

For others, it involves having the means to secure the future for themselves and their loved ones, ensuring stability and peace of mind.

Being rich can also include a sense of fulfillment and contentment in non-monetary areas. Philosophers argue that true richness lies in experiences and relationships, forging deep bonds that enrich life’s tapestry. It may also include personal growth and self-actualization, constantly learning, and evolving as an individual. 

For me, it’s my use of time and how much of it is in my direct control. Having a lot of spending power allows me to use time in a manner more pleasing.

In other words, richness allows me to do far more activities without feeling I have to.

Ultimately, you decide what being rich means to you. Think about it thoroughly, because once you do, your journey will be greatly influenced by it.

Knowing What You’ll Need For Retirement Helps Determine How To Use Your Job

Think about retirement often.

In another post, I wrote about how to become rich through simple methods.

In summary, it’s about having income to invest in compound growth assets for a long enough time. That’s essentially it. Investments grow without doing much, if any, physical labor or prolonged attention.

Your job, any job, can be a constant source of money that can be invested in proper compounding opportunities. Of course, the greater your income, the more you’ll have to invest, then the faster and larger your riches will grow over time.

How long, however, is reliant on a critical question. What amount do you believe you’ll need by retirement?

The previous section probes what it means to be rich. If you have a basic understanding of what that is, then start to quantify it. It’s an important answer as it will very much influence your path. 

There are many ways to determine that figure. One well-proven and widely referenced way is the 4% Rule.

The rule was popularized by the Trinity Study, a research project that examined historical market data and withdrawal rates. It found that a 4% initial withdrawal rate, adjusted for inflation each year, had a high probability of lasting for 30 years or more in various market scenarios.

The 4% rule typically goes as follows. 

  1. Determine your desired annual retirement income. Start by estimating your annual expenses in retirement, including housing, healthcare, food, travel, and other costs. 
  2. Next, calculate your retirement portfolio. That consists of the total amount of money you have saved for retirement, including investments such as stocks, bonds, and other assets.
  3. Apply the 4% rule by multiplying your retirement portfolio by 0.04 (4%). This will calculate the amount you can withdraw in the first year. For example, if your portfolio is $500,000, your initial withdrawal would be $20,000.
  4. Lastly, adjust your annual withdrawal amount for inflation. A common approach is to increase the withdrawal by the inflation rate for that year. For instance, if inflation is 2% in a particular year, you would increase your $20,000 withdrawal by 2% to $20,400 for that year.

Here’s a more detailed example that applies the 4% rule.

  • You determine that being rich means traveling to the world’s beaches. 
  • You figure out that your annual living expenses will be around $40,000.
  • You further discover that you can go to a different beach every 3 months, staying for 2 weeks.
  • The cost to visit those areas, through some creative planning, will be about $1,000 per visit
  • That’s 4 Annual Trips x $1,000, which equals $4,000 annually. 
  • You round up your annual retirement cost to be about $45,000.
  • Your target retirement age is 65. 
  • Based on the 4% Rule, you’ll need approximately $1,150,000 in retirement savings
  • That comes to a little over $45,000 you can withdraw every year after 65.

The only factor not accounted for in the above scenario is inflation. However, it still provides a solid expectations overview.

Determining what being rich means, and then pegging that with a fiscal number, presents different journeys to realizing your financial vision.

The Goal Is To Invest As Much Money As You Can, For As Long As You Can

Long term planning and consistent investments grow over time.

According to the Economic Policy Institute, many people retire with little to nothing, struggling to make ends meet and facing a future marked by financial uncertainty.

A lack of financial literacy is a significant barrier to effective retirement planning. Many are unfamiliar with investment options, the power of compound interest, and strategies for maximizing their savings. 

Compound interest is often referred to as the 8th wonder of the world and for a good reason. It is the process by which your initial investment grows not only on its own but also on the accumulated interest over time. The longer you invest, the more your money compounds, leading to exponential growth.

Time is an investor’s best friend.

The earlier you start, the longer your money has to grow. You gain the advantage of time and the potential to ride out short-term market fluctuations. This long-term perspective helps mitigate risks and allows you to benefit from the market’s historical upward trajectory.

Consistency is the key to success.

Regularly contributing to your investment portfolio, regardless of market conditions, helps smooth out volatility and takes advantage of dollar-cost averaging. This approach entails buying more shares when prices are low and fewer shares when prices are high, ultimately reducing the average cost per share over time.

For Those Over 40 Years Old

There are clear advantages those over 40 have when compared to people 20 years younger. The greatest of those is wisdom. However, the will to leverage that wisdom and the energy needed to achieve whatever it is you want can still be daunting.

In brief, men and women over 40 who want to become financially wealthy need to factor the time to retirement and their earning power. Generally speaking, the means to achieve a greater income should be more likely for someone in this age group.

It’s important, as the distance from when one starts investing to leaving the workforce is often shorter. To account for the loss in time, larger contributions make up for the difference.

You can read more on how to get rich if you’re over 40 in an article I wrote here.

The S&P 500 Index Has Been Regarded As The Best Long Term Investment

A plant that produces gold coins.

Warren Buffet has often stated, for those who do not want to spend hours researching stocks to find a good investment return, the S&P 500 Index is among, if not the, best.

Investopedia wrote an article detailing the power of compounding interest from the S&P 500. It described an investment of just $10,000, without any additions, sitting over 20 years. Those funds turned into an amount that exceeded any investments through active managers. 

The NY Times wrote how not a single managed fund out of over 2,000 reviewed, over 5 years, was able to beat the S&P 500.

Created in 1957, the S&P 500 has become synonymous with the U.S. stock market’s performance. It’s been consistently hailed as the premier investment choice. Here are some reasons why.

Broad Market Representation

One of the key strengths of the S&P 500 Index lies in its composition. It represents the largest 500 publicly traded companies in the United States. This provides exposure to the overall health and performance of the U.S. economy. Individuals can gain access to a basket of companies, mitigating the risk associated with investing in individual stocks.

Long-Term Consistency

The S&P 500 has demonstrated remarkable consistency in delivering long-term returns. Historical data shows that, over extended periods, the index has generated positive returns. While short-term fluctuations happen, the S&P 500 has consistently demonstrated resilience and recovery from market downturns.

Professional Management

The S&P 500 Index is not actively managed by a team of professionals. Instead, it follows a rules-based approach, ensuring transparency and objectivity. The index committee regularly reviews and selects companies of the index based on predefined criteria, such as market capitalization and liquidity. This passive management style keeps costs low.

Widely Accepted Benchmark

The S&P 500 Index has become the benchmark against which many investors and fund managers measure their performance. Numerous mutual funds, exchange-traded funds (ETFs), and other investment products are designed to replicate or closely track the index’s performance. 

Liquidity and Accessibility

The S&P 500 Index is highly liquid, meaning it can be easily bought or sold without significantly impacting its price. This liquidity ensures that investments can enter or exit their positions quickly

Dividends and Reinvestments

Many of the companies within the S&P 500 Index pay dividends to their shareholders. These dividends provide an additional income stream, enhancing long-term returns. You can reinvest these dividends back into the index or individual stocks, compounding their investment over time.

As always, it’s important you conduct thorough research, consider your risk tolerance, and consult with financial advisors before making any investment decisions.

The S&P 500’s track record, however, speaks volumes, making it a compelling option for those seeking a diversified and potentially rewarding investment.

How You Live Will Determine How Rich You Become

How do you want to live?

Forbes published an article that explores the proper mindset to becoming rich. Stanford University’s new publication, the Stanford Report, interviewed Dr. Jacob Towery, an adjunct clinical psychiatry instructor. Dr. Towery explains how shifting your mindset can improve your health, decrease stress and help you overcome life’s challenges.

Cultivating a Wealth-Oriented Mindset

To embark on the path to becoming rich, a positive and growth-oriented mindset is vital. Belief in your ability to create abundance and seize opportunities plays a huge part in your success. The development of perspective, shifting to a proactive approach to life, and viewing challenges as stepping stones to success, eases the journey to financial abundance. It may even make it fun.

Continuous Learning and Personal Growth

To thrive in an ever-evolving world, a commitment to lifelong learning is crucial. Expanding your knowledge, whether it be through reading books, attending seminars, or seeking mentorship, significantly helps during this process. 

Physical Health

If you don’t feel well, the motivations and means to perform the tasks tied to financial wealth become far more difficult. Prioritize your health by adopting a balanced lifestyle that incorporates regular exercise, a nutritious diet, and adequate rest. Good health forms the bedrock upon which all aspects of life are built. A strong and energized body enables you to seize opportunities, work effectively, and enjoy the fruits of your labor.

Another article published in Forbes explains how wealthy people are more dedicated to good health.

Creating a Nurturing Environment

Your environment plays a pivotal role in shaping your journey toward wealth. Create an environment that fosters creativity, productivity, and positive energy. Invest in personal development resources, such as a dedicated workspace, motivational books, and educational courses. 

See one of my previous posts that details the benefits of Feng Shui and how it works with Environmental Psychology to create healthy surroundings.

Embracing Minimalism

Embracing minimalism encourages you to focus on quality rather than quantity. It involves decluttering your life, simplifying your material possessions, and cultivating an appreciation for experiences over things. By adopting a minimalist approach, you free yourself from the burden of excess and create space for what truly matters.

Spiritual Well-Being

Achieving wealth isn’t solely about accumulating material possessions. It involves nurturing your spiritual well-being, finding purpose, and connecting with something larger than yourself. Align your actions with your values and create a harmonious balance between personal and financial growth.

Your Job…A Normal Job…Can Make You Rich, If You Commit To Everything Else 

Money in exchange for your time and the work you do.

Recapping, if you have a strong understanding of what it will mean to be wealthy, and you’re willing to live and think in a way that aligns with it, a normal job can make you rich. By living in a way where expenses are at a minimum, and investing heavily in a compounding asset, like the S&P 500 Index, in enough years, you can very much become rich.

The 80% Income Rule

The publication Fortune, among others, recommends multiplying your salary or total income by 80%. That figure is what will most likely provide you with a comfortable retirement.

According to Indeed, the average salary/income across the United States is approximately $50,000 annually. 

The average Social Security payment is about $1,500 monthly ($18,000 annually).

Let’s use that $50,000 average salary figure in this example.

  • 80% of $50,000 is $40,000, which is the estimated annual income to retire comfortably.
  • You can expect about $18,000 annually from Social Security.
  • That means you’ll need to be able to withdraw roughly $23,000 annually from your investments.
  • Using the 4% withdrawal rule, you’ll need to accumulate about $600,000 in retirement savings.
  • On average, the S&P 500 Index provides a compounded return of 8%.
  • Now, let’s presume you’re 40 years old and have never invested before this age.
  • To reach $600,000 by the age of 70, you’ll need to invest $440 every month, for 30 years.
  • …and if you were to invest $440 a month, at 8% annual returns for 40 years, your retirement account would total over $1,300,000.

The More You Earn, The More You Can Grow…And Your Job Is A Great Place To Do Just That

Continuing from the example above, $440 each month can be a lot, depending on one’s lifestyle and obligations…or is it?

Consider the following.

Expense Breakdown And Allocation

NerdWallet posted an article that details what the average monthly expenses are for most Americans. That figure comes to $3,405 for one person, $5,782 for a family of 2, up to $7,749 for a family of 4. You should note, the figures beyond a single person presume both spouses are earning a total average income of $100,000 or more.

The following cost breakdown, however, applies to all expense figures.

  • Taxes: 25%
  • Housing: 15%
  • Transportation: 12%
  • Utilities: 10%
  • Food: 9%

For many people, the remaining 30% goes to things like entertainment, including dinners and drinks. That rounds to roughly $1,000 a month.

Deduct $440 from the $1,000, and that still leaves $560 remaining to be used for whatever that 30% expense covers. 

Based on the breakdown of average expenses described, putting aside $440 should be quite doable.

Performance Promotion

According to the Bureau of Labor Statistics, the average performance base pay raise is 3%. When applied to a $50,000 salary, that comes to an additional $1,500. 

Presuming a tax rate of approximately 25%, that nets $1,125 in, annual, take-home pay.

From that alone, there’s an additional $880 ($440 x 2) that can be invested.

Note, I understand tax rates can vary wildly depending on which state you may reside in, but this should give you a solid picture to think about nonetheless.

401(K) Company Match

Most companies also offer some kind of 401K or retirement account where a certain portion of the funds invested is matched by the employer.

This is an excellent way to also accrue your retirement savings goal.

Be Awesome At What You Do, Change Job Roles

Strive to become exceptional in your current position. Go above and beyond expectations, deliver high-quality work, and consistently exceed targets. By demonstrating your value, you increase the chances of earning promotions, salary raises, and bonuses.

Take an active interest in your company’s structure and growth opportunities. Regularly communicate with your superiors to understand the skills and experience needed to progress within the organization. Explore opportunities and be proactive in expressing your interest.

Negotiate Your Salary

When it comes to compensation, don’t be afraid to negotiate. Research salary benchmarks for your role and experience level, and present a compelling case for a raise during performance reviews or when taking on new responsibilities. Highlight your achievements, contributions, and the value you bring to the organization. 

Consider A Side Hustle

Granted, this is not so much something you get from your normal job. However, your current job could inspire doing some side work, inspired by your employment, but of course in alignment with what is acceptable with your employer.

For example, if you work for an accounting firm, you could create a blog or YouTube channel teaching people the basics of accounting and getting paid from advertisements.

Another example is if you work for a retail company that sells outdoor products, like lawnmowers, you could also create a blog / YouTube channel reviewing those products, including offering a consultation service for landscapers. 

In general, whatever work you do, so long as you excel at it, will, by default, make you a “considered expert” on the subject matter. People are constantly looking for those who can save them time and help them solve problems related to your job field. 

There’s an old saying. “Knowledge is power.” 

I’ve never agreed with that.

Knowledge is POTENTIAL power. Until it’s used, knowledge is worthless. 

Until the next time, cheers!

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