How to Build Wealth for Beginners: 4 Easy Steps (2024)

If you want to reach financial freedom, learning how to build wealth is non-negotiable. Wealth deals with more than just money in the bank. It is about creating a system that allows you to bless your family, community, and beyond. But, where do you start?

There are only two classifications of income for most people in the United States according to the IRS— earned income and passive income. The money you work for is earned income, and the money you receive from assets is passive income. I refer to earned income as first X income (see my blog on the Triple X factor if this does not make sense to you!) Most people in the United States live right around the first X— that is, they live off of their job. In this blog, I will show you four easy steps to build wealth. They are:

1. Become a High-Value Asset, not a Liability
2. Build a Budget with the 80% Rule
3. Know the Difference Between Assets and Liabilities
4. Learn How to Get Rid of Debt

4 Steps for How to Build Wealth For Beginners

Step 1: Become a High-Value Asset, Not A Liability

In order to have an above-average income, you must become an above-average person. Learn to pour into yourself. Here are some ideas:

• Read something inspirational for 30+ minutes every day.
• Surround yourself with people you aspire to be like.
• Listen to those people, even if their opinions run counter to your personal beliefs.

In addition, it’s important to, LOOK. Success leaves clues. One of the greatest mistakes I made as a young man was assuming how and why people came into success without ever really studying the successful people in my life.

In 1 Corinthians 11:1 (NLT), Paul said, “Imitate me as I imitate Christ.” We grow by imitating solid examples of successful people with Christlike character.

Step 2: Build a Budget with the 80% Rule

If you want to learn how to build wealth, it comes down to basic math. If you can live off of 70%, I advise it, but 80% is the sweet spot for many who are getting started. Here’s how it works:

• Keep the 80% for your expenses. This includes debt payments, housing, food, fun, etc.

• Tithe 10%

• Put 5% with someone who can professionally invest it and personally invest the other 5%.

This is what mastering your money looks like–giving every dollar a purpose! It is hard to sacrifice at first, but as you learn to get into a rhythm, you will begin to feel successful and have fun as you reach the first X.