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Financial Security: 5 Ways to Build Wealth on a Small Salary

Updated on March 8, 2019
Isivwe Muobo profile image

Farrah has been a financial analyst for years and continues to write articles geared toward helping you improve your earnings online.

Introduction to Building Wealth on a Small Salary

I am a salary earner and like most earners, I earn an income that gets spent way before the money even hits my account. I would buy a few things on credit (albeit things I really needed at the time), hoping to pay when I get paid. By the time I did, I had nothing left or just enough to tide me till the next payday.

This used to be my reality; I was ever broke and was miserable, struggling to keep my head above water and knew I wanted out of this joy-sucking rat race, and fast too.

For a long time, the thoughts that dominated my mind were "How can I build wealth on a small salary?" and "how to become rich with no money." I decided to make some serious and conscious effort to change my financial status.

I read a few financial books, especially ones written by Robert Kiyosaki and got to know building wealth takes a lot of time, effort, and money. I knew if I wanted to build wealth, I needed a good plan, one that was fail-safe, as I couldn't afford to fail.

I did a little research to see what worked for people and how I could go about implementing these same or similar plans. I saw quite a lot, but a few required such huge capital, I dropped them immediately. In the end, I came up with a financial plan that is working just fine for me.

I set it in motion a few years back, and while I haven't achieved even a fifth of the financial future I dreamed of, there is this confidence that comes with knowing I have attained some level.

Here are 5 Reasons Why You Should Plan for Financial Security

These reasons gave me the push to fight for the financially secure life I've always craved.

Building wealth invariably means you have a more financially secure future and these will bring some amazing benefits into your life. Here are some you can expect to see:

1. Financial security means you worry less about money as you'd have enough to take care of your needs and most of your wants.

2. You are also less likely to come down with any stress diseases associated with worry as you would worry less.

3. Having financial security ensures you can live the lifestyle you've always dreamed of.

4. Money problems is one of the top causes of relationship strife and divorce among couples. A study carried out showed couples that experience a perpetual lack of funds, or one where the woman earned significantly more than the man experience relationship dissatisfaction and were more likely to split.

Having financial security will likely give you a better, happier relationship.

5. While not proven, it is believed that people with a better financial security are less likely to be sad. This doesn't necessarily mean the money makes them happy, but they are likely to have less reasons to be sad.

6. You also will have a little more time on your hands as you wouldn't have to work 24 hours of the day to earn a living; time that could be put to other use.

7. Lastly, financial security keeps you protected in times of emergency, especially if the emergency is financially related as nine times out of ten, you'd have the financial capability to meet it.

Five Ways You Can Build Wealth on a Small Salary

Here are five ways you can build wealth on a small salary to get the financial security you crave:

1. Get Out of Debt

The first step in your journey to building wealth or financial security is to get out of debt. A debt is a huge hole in the center of your life that sucks away at anything worthwhile.

Since you can't erect a building on a hole, it goes to reason that you would want this hole covered first.

Here are a few ways people get into debt:

- By having expensive habits.
- By trying to keep up with the Joneses.
- By purchasing items on impulse, even when they clearly don't need them.
- By making a series of bad financial decisions.

Getting out of debts means paying off whatever money you owe. It could also mean making slight to major lifestyle changes that would ensure you don't make any more money mistakes.

If you owe money, a good way to pay off this mon would be to break the debts into smaller bits and concentrate on paying them off one at a time until they're all paid up.

2. Draw Up a Budget Before the Money Comes

Once you are done paying up your debts, you're now truly on your way to building financial security.

The idea of drawing up a budget is to ensure you don't overshoot your earnings again and fall back into debt.

Also, when done right, budgeting will leave you with some extra money that can be put to good use.

3. Save and Invest

There are several formulas people employ for how their money gets spent. Some practice the 30/30/40 rule (where they keep 40% of their earnings as running cost to pay bills and other expenses, 30% for personal use, and the other 30% to be put into one saving or investment.

A lot others would just set aside a fixed amount to be saved or invested monthly and leave it at that.

Save a portion of your salary each month, making sure you are consistent at this. After a while, you'll find out you have a substantial amount saved up or invested earning interest at a compound interest.

4. Set Up an Emergency Fund for Unforseen Needs

A small portion of your income each month should also be kept in an emergency account. This account will cater to any need not in your budget that might spring up.

It will also keep you from dipping into your savings or money set aside to be invested, an action that would set you back on your investment goal

5. Set Up Passive Income Streams and Keep These Growing

A lot of people won't get rich from just one source of income. For the majority, you'd need a few to give you that financial security and keep you in a particular lifestyle you need.

You already have two income streams at this point: your salary and the money/ interest coming from your investments. While these are usually enough to make you rich, you can hasten things along and gain financially security faster by adding other streams of income.

Passive income is one of the best income opportunities you can add at this point. You set up it up just once and earn from it from life.

Passive income is also great as you aren't exactly needed to maintain it to keep the money coming. You might need to once in a while, but even without doing so, this income opportunities would continue to yield, so long as they've been set up.

Some good passive income opportunities you can set up include:

- Write and publish ebooks on self-publishing sites like Amazon KDP, Draft2Digital, Lulu, Blurb, Scrub, etc.

- Write for revenue-shating sites like hubpages and infobarrel.

- Make videos and sell or monetize on sites like YouTube, DailyMotion, Brightcove, and MetaCafe.

- Sell Stock Photographs on sites like 123rf, Fotolia, iStockphotos, Getty Images, Alamy, etc.

- Build a Blog

- Invest in Real Estate.

- Buy into a Business as a Silent Partner.

- Create an App and upload for paid download on Playstore.

- Develop an Online Course

Which of these passive income streams have you tried?

See results


I should point out that even when you set up these passive income opportunities, you might not start to see any tangible income until after a while.

Once the income starts to come, it will be enough to make you glad you took the decision to start.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2019 Farrah Young


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    • Miebakagh57 profile image

      Miebakagh Fiberesima 

      11 months ago from Port Harcourt, Rivers State, NIGERIA.

      Hi, Farrah, you are always welcomed.

    • Isivwe Muobo profile imageAUTHOR

      Farrah Young 

      11 months ago from Nigeria

      Have a great day too, Miebakagh Fiberesima

    • Miebakagh57 profile image

      Miebakagh Fiberesima 

      11 months ago from Port Harcourt, Rivers State, NIGERIA.

      Hey, Farrah, thanks for the response. Have a great day today.

    • Isivwe Muobo profile imageAUTHOR

      Farrah Young 

      11 months ago from Nigeria

      Hi Miebakagh Fiberesima, thanks for those kind words. I appreciate you taking the time to read and comment as well.

    • Miebakagh57 profile image

      Miebakagh Fiberesima 

      11 months ago from Port Harcourt, Rivers State, NIGERIA.

      Hello, Farah, thanks for sharing. Your article is informative and educational. Iagreed with all the content. It is a wonderful master piece.

    • Isivwe Muobo profile imageAUTHOR

      Farrah Young 

      11 months ago from Nigeria

      Hey Flavia, thanks for taking the time to read and for those kind words.

      I'm glad you liked the article.

      I checked your post on "Why You Always Get Dumped" and it was superb.

    • flavia mukyala profile image

      flavia mukyala 

      11 months ago

      A truly great and inspiring article. it has opened my financial eyes

    • Isivwe Muobo profile imageAUTHOR

      Farrah Young 

      11 months ago from Nigeria

      Yea, it is fair. I had Adsense before writing, but was unable to link it to my hubpage account until I had ten 1200+ word articles.

      You should be able to once you have nine or ten articles. I wish you goodluck.

    • profile image

      Tommy Limpitlaw 

      11 months ago

      To be fair, a dollar for a few articles and a few followers is a good start. I’ve just written my fifth article so I should be able to apply for Google Adsense after a few more.

    • Isivwe Muobo profile imageAUTHOR

      Farrah Young 

      11 months ago from Nigeria

      Hi, Tommy, yea, hubpages is a great way to earn passive income and build wealth.

      While I have been a member for 10 years I only just started writing a week back and in that time I have earned almost a dollar. Lol. This amount may be small, but considering I have very few articles that haven't even ranked, it is a good sign.

      I would give it a try as whatever article you post here will keep earning for years.

      Thanks for reading and commenting.

    • profile image

      Tommy Limpitlaw 

      11 months ago

      Good read. I wish I knew about HubPages years ago. I don't expect to get rich from it but a bit of spending money will be nice.

    • Isivwe Muobo profile imageAUTHOR

      Farrah Young 

      11 months ago from Nigeria

      Pam, yea, building an income stream does take time, but everyone should consider it as working with just one source will likely not make you rich.

      Thanks for taking the time to read and for the comment.

    • Pam Morris profile image

      Pam Morris 

      11 months ago from Atlanta Georgia

      Farrah, what an inspiring article. I read several things that I find extremely useful and I willing to try. As you stated they wouldn't make me rich well not overnight anyway, but I know if I maintain and work at it, it will be beneficial to my income. Thank you for sharing this article.


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