The stages of building wealth are fascinating.
In fact, building continuous wealth requires different strategies as you get richer.
In other words, the things that you did to build your first $10,000 in net worth will be different than building $100,000. Or, $1,000,000.
Here’s a simple outline of how different levels of wealth are built:
- $1,000 to $100,000 ⇢ Boost your income, save
- $100,000 to $1,000,000 ⇢ Invest majority of income
- $1,000,000 to $10,000,000 ⇢ Buy appreciating assets
At first, your primary goal is to boost your income and start saving and investing. This is your foundation, and everything stems from this.
To progress above $100,000 in net worth, invest your money in stocks, bonds, 401(k)s and Roth IRAs. Of course, boosting your income during this phase is critical as well, because the more money that we make, the more we can invest.
Then, most people have ownership of lucrative assets beyond just stocks and bonds. For example, many 8-figure people own businesses (or parts of them). Real estate moguls build their net worth through buying and renting/selling property. These are just a couple of examples, of course.
Your salary is less critical to continue building wealth. Salaries help build your foundation, but the super-rich are rich because of their assets, not their salaries.
Super wealthy people own assets.