How To Get Rich Off $30,000 Per Year

A lot of people are feeling discouraged by the current economic situation. The unemployment rate is at 9% and the underemployment rate is at 17%. A lot of Americans are feeling like their chance at the American dream is slipping away since wages are not growing. Since 1980 wage growth for middle income Americans has been tepid at best. All of these circumstances are causing people to believe that they will never be financially well off.

The truth is that you do not have to make a ton of money to amass a lot of money. Your salary does not have to be $400,000 or $500,000 a year. You can get rich over time off of a much smaller amount of money using the following tips:

Reduce your debt load

Most people do not understand that making more money is not always the solution to their money woes. Here is a perfect example of this situation.

James makes $35,000 a year.  He buys a Honda Civic that has a payment of $350 a month and lives in a home with a monthly mortgage payment of $1,000 a month. He has credit card and student loan debt totaling $50,000. James believes that if he can just increase his income that his money problems will end.  James gets a raise and winds up doubling his salary. Does James save the extra $35,000 a year?

get rich car

Of course not! Instead James buys a BMW M3 which increases his car payment to $700 a month. He buys a newer home that is commensurate with his new income level that has a mortgage payment of $2,000 a month. James has higher utility, maintenance, and repair bills plus he still has the original loan debt. Although James is making a lot more money, he doesn’t save any more money because he increased his expenses right along with his salary.

That is the problem. The average person spends every dime that they make. They always find new expenses to eat up any salary increases that they may earn. That is why celebrities go broke so easily. They may make millions of dollars a year but they increase their living expenses to the same amount.

The only way to keep more of your own money is to reduce your existing debts. Paying down your debt allows you to hold onto more of your own money. A person that makes only $35,000 a year and is debt free is in a better financial position than someone who makes $70,000 a year and has $70,000 in annual  debt.

Make every dime that you have work for you

The lower that your income is, the more important that it is for you to maximize 100% of your income. Every bit of money that you have should be earning you a return on your money. You can multiply your money faster by always getting a positive return on investment (ROI). This means applying wise stewardship principles to small amounts of money.

It may not seem like it matters to you but even small amounts of interest add up.

If your credit union is paying you 2% on your money and your bank is paying you 0.10%, move your money immediately. That 2% may look small but that is 20 times the rate of return you are earning. If you can get a 10% average annual return on a mutual fund compared to the 7% that another fund is paying, you should make the switch. That 3% per year is a 30% additional return just using simple interest.

Avoiding monthly maintenance fees at your bank, overdraft charges, and ATM fees can save you thousands of dollars over your lifetime. This is all money that you are just giving away to your financial institution for free. Small things like getting rid of mortgage late fees, auto payment late fees, and credit card late fees can mean the difference between having extra cash to invest and being cash strapped on a monthly basis.

When you are on a tight budget, you cannot afford to be lazy. Even small things like letting Coinstar process your change can cost you a lot of money over time. Wrapping your own change can save you from paying a 9.8% fee just for the privilege of turning your coins into cash. Little amounts of money added up over long periods of time can create wealth.

Be aggressive

Building wealth requires that you take some risk. If you have a small sum of money then you may find that you need to be a lot more aggressive to grow your capital than a wealthier investor.  Warren Buffett himself was a really aggressive investor at a young age. He created new investment capital by selling one stock to generate enough money to buy another one.

Being an aggressive investor does not mean that you need to be a foolish investor. A smart investor is incredibly aggressive when the market is cheap because he knows that it will not be this way for you. Occasionally, the market will prevent you with an opportunity to buy shares of a company at once in a lifetime prices. Do you take advantage of these opportunities or do you sit on the sideline?

If you want to earn a rate of return that other investors will not get then you have to be willing to take some risks that other investors will not take.


  1. Savings has nothing to do with how much you earn! I started savings when I was earning $1.10 an hour. I admit it was not much. You start small and add to it. Savings should always be a priority! It gives you choices!

  2. avatar Rickard says:

    When you are on a lower income, on top of saving I think that there is alot to be gained from searching the second hand market for longer lasting value for your consumption goods. An example would be that instead of going to ikea and buy new kitchen chairs for 100$ you could try to find some good quality chairs (maybe by some designer) on ebay for the same amount. And when time comes to upgrade your kitchen maybe you can still get 50$ for your quality chairs instead of 0 for your used ikea chairs.

    Same goes with things like a coffemaker, buying a good brand used one for the same money as a cheap new one and the second hand one will probably last twice as long. And when something happends with the good brand one there is a chance you could get your hands on a spare part instead of having to buy a new unit.

    Always trying to get the most out of your money leaves more left for saving… And when i say trying to get the most out of your money it’s not the same as being cheap, always searching for the lowest price. That I think could actually hurt you in the long run.

    Cars are another good exampel on where calculating and comparing total owning/running cost taking depreciation into account can really make a difference. Maybe its better to go for the mid 90s mercedes than the 2007 hyundai with the same price tag…

    Just my two cents.

  3. Great post. It is an excellent reminder for those who like to spend the money they get right away. I liked how you said make your money work for you. This is such good advice for people who are all about the moment.

  4. I dropped income for quite a while and learned to live very frugal. No vehicle, home cooked food etc etc. Now I earn a little more I have kept my frugal sensibilities and money is piling into my savings….. It’s pretty simple really, just don’t spend much 🙂

    Good post as always.

  5. You hit it right on the button.

    I’ve been telling people this for years. Before I got laid off and started my website selling. I used to work as a Sr Financial Service Advisor, and as an asst Vice President for a financial institution. It amazed me to see how much people would spend! I saw people making $30k per year, living in a $30k house, and driving a $60k Escalade with $8k rims on it. They could not make their payment because their debt-to-income ratio was through the roof! It made no sense to me!

    Great blog! Keep up the good work!

  6. Great post. I this highlights the importance of living within your means. It does not pay to live a lifestyle that prevents you from saving. Sooner or later your house of cards will come crashing down.

  7. This fictional (maybe not fictional?) James character is the perfect example of a person that says they want to be rich and well off, but then acts in a way that is completely counterproductive to their stated goal. It doesn’t make sense until you realize that this person doesn’t really want to be rich and well off, they want to keep on doing exactly what they’re doing right now, which is buying BMWs. If they really wanted to be rich, they would learn how to be, seeking out those who are rich and ask them they did it, and begin to change their lifestyle to attain their goal.

  8. I absolutely agree. I’m great at the first two and not so hot on the second. I think after my MBA I’ll hopefully be putting enough away to feel more comfortable about taking risks. Until then I’m mostly drawing down so I don’t know how much it matters.

  9. Great article. I couldn’t agree more.

    I cracked $40k for the first time last year, but I still believe I can retire in 11 years, which puts me at 40. I’m getting to the point where I can save 70% of my net income now that I live car-free. Once I decided I was going to walk the path toward financial independence I cut out cable, I stopped eating out for lunch, I cut my iPhone plan, and recently sold my car. Saving most of your income doesn’t require a large income. If you make a dollar and save 70 cents, that’s money in the bank. I think if you save 70% or more of your net income and invest smart for 10-15 years you’ll probably be very financially flexible at that point in terms of career choices and free time. Delayed gratification is where it’s at for me.

    The only thing I’m not sure about is the last part in the article. I don’t really believe in being too agressive, but that’s just me from a fundamental standpoint. Otherwise, great stuff and saving most of your income and investing wisely is surely the path to financial independence. It’s no get-rich-quick scheme, but it does work.

  10. I love this article because that is about what my DH and I make in a year and we save abut 18% of our income. We hope to get it up to 30% but we do plan to have kids soon and that will make it harder. Living on $30,000 and saving does mean sacrificing and making choices but at what income do you not? Well, besides Buffett level.

  11. avatar realistic says:

    I love to see an M3 lease payment for $700 a month! LOL

  12. If I made $70,000 a year, I wouldn’t buy a freakin’ BMW immediately. I’d save up some money and buy a nice car w/ just a few payments.

    • You may think that – but 70k a year gets eaten up VERY quickly
      in taxes and the things you usually have to do to earn the 70k in the
      first place….
      I am NOT advocating spending money you don’t need to, but to get
      a 70k job, you probably have student loans. You also probably need
      to wear reasonably nice clothes to work, which may then involve weekly
      dry cleaning bills. You also cannot drive a junker, or you won’t get any
      “respect” from your co workers. You’ll also generally need to eat lunch with
      the “in crowd” to maintain your social networking and secure better projects….
      Sometimes, people at an office play golf – another huge expense…..
      I’m not saying you MUST do these things – I am simply saying these are
      some of the things that get you into and more importantly keep you into the
      group of people earning that. You can’t just bicycle to work as a professional
      and wear a burlap sack when dealing with your clients / co workers.

  13. I agree with everyone there is no quick or easy way, throw a mortgage a loan a car or 2 then add a baby see where it goes. i make about 75k a year my wife over 200k we save but not like a wish we did. 4300 mortgage 4 cars one for each and each kid who need them for work and college during school year. we also pay 90k a year in college costs. Oh to be young and have all the right answers. wait till your older. save now, any advice at 46 yrs old I could give open an account with a Merrill Lynch or any other large house and save 1-300 a month dont touch it and in 15 yrs you should see about 120k. Oh and get employeed by a large company do the 401k match and never leave. Put your 20 yrs in shut your mouth and nod when you disagree with a boss. You win at 45 when you retire.

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