My daughter recently asked how someone gets rich. Before I share my answer, it’s important to distinguish rich from wealthy (and upper middle class).
Rich is having a high income, typically north of $300,000 a year in America, regardless of debt. Wealthy is possessing a large amount of money, property, assets, savings, and/or investments relative to debt (aka “high net worth”).
For reference, the lower economic class makes less than $50,000 a year; middle class between $50-150k, and upper middle class between $150-300k. Super rich (just 1% of Americans) make half a million a year or more.
Depending on how fast you spend money, it’s possible to be “rich but broke.” It’s also possible to become wealthy over time without ever being technically rich in any given year. And depending on your lifestyle, where you live, and your family status, it’s possible to live rich and/or approach wealth without hitting those exact numbers.
That said, there are five proven ways to make a lot of money. They are as follows: Continue reading…