Secret to getting rich

Save 25 percent of what you make. That allows you to get rich in fewer than 30 years.

  • close
    A Spirit of Ecstasy emblem is seen on a car at the Rolls- Royce plant where the Phantom and Ghost models are manufactured in Goodwood, near Chichester in south England May 10, 2011. One secret to getting rich is to forgo spending on status symbols and save 25 percent of your income.
    Toby Melville/Reuters/File
    View Caption
  • About video ads
    View Caption

Here’s how to get rich quickly.

Whenever you receive income of any kind, immediately put 25% of it into a savings account. Whenever that savings account reaches $5,000 in total balance, invest it in something, ideally something different than what you’ve invested it in before. Buy stocks. Buy CDs. Buy commodity or precious metal or land ETFs. Buy shares in individual companies that you believe in. Then just watch it grow.

Wait, that sounds like normal investment advice! How will that help you to get rich quickly?

It’ll get you rich much more quickly than almost any other plan out there. You just need to re-evaluate your idea of quickly.

In terms of building wealth out of nothing, it doesn’t happen overnight (unless you happen to have a brilliant idea and the skills to perfectly execute it, which happens only a few times a generation). It takes time. It also takes discipline. Most of all, it takes patience.

Patience is a virtue that’s often overlooked. When people think of getting rich quickly, they think of buying a lottery ticket and having $50 million next week. They think of having some sort of secret insider information that will double their money in a month (like those endless penny stock scams that constantly float around). They think of arrangements where they hand their money to a guru who will magically cause it to multiply several times, never asking themselves why that guru even needs their money (hint: money gurus can’t perform magic).

In the real world, building personal wealth doesn’t work that way. It usually comes through saving up your money over a long period of time and putting that money to work over that same long period. However, the more diligent you are about the saving and putting that money to work, the quicker you will get rich.

Let’s say you have someone who is making $40,000 per year. They have no debts, but no assets, either – a net worth of $0. Let’s also define “rich” as being having 20 times your annual income in investments, which means if the investment earns just a 5% return, you can live on just that return in perpetuity.

If they save 1% of their income each year and put it in investments that earn an average of 7% per year, it will take 74 years to cross the “rich” mark.

Bump that savings up to 2% per year (from $400 to $800 per year, or from $15.50 per biweekly paycheck to $31), it will take 63 years to get there. Add 1% and you subtract nine years off of the time it takes to become rich.

Let’s bump it up to 5% per year. It then takes only 50 years to get there.

10%? It takes only 41 years.

Let’s say you’re a prodigious saver and save 25% per year. It takes you only 28 years to get there. Start at age 25 and you’re retired at age 53 on your own investments. When Social Security starts rolling in, it’s icing on the cake.

This really is the recipe for success. If you make $40,000 a year, live as though you make $30,000 a year. If you make $80,000 a year, live as though you make $60,000 a year. Bank 25% of your paycheck and live on the rest.

What you’ll find is that your lifestyle adjusts when your checking account does. The perks of life become actual perks that you appreciate instead of just a static routine of disposable pleasures. You can look forward to a future that involves doing whatever you want instead of working at a job until you’re unable to work any more.

If you want to get rich quickly, you already have the tools you need. The question is whether or not you have the courage to do it.

Add/view comments on this post.


The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link above.

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.




Save for later


Saved ( of items)

This item has been saved to read later from any device.
Access saved items through your user name at the top of the page.

View Saved Items


Failed to save

You reached the limit of 20 saved items.
Please visit following link to manage you saved items.

View Saved Items


Failed to save

You have already saved this item.

View Saved Items