Five ways to start building wealth

Starting out in one’s life it can seem exciting, overwhelming, sometimes disappointing, even scary. Like schooling, thinking about retirement and being wealthy seems so far away.

I recall the first job out of Engineering School paid me $42,000 before taxes. I was one of 3 in my graduating class that got a job in the year 2002.

The Tech bubble! Remember that black swan event?

It was a Field Technician job in the Construction Industry — specifically a Building Automation Technician. Seems like a lifetime ago now, but it was funny, because I lived at home and I went out and bought as much car as I could afford, brand new VW GTI. It was sick — I loved that car. It ate up most of my income every single month.

The idea of building wealth seemed so far away that I said to myself, nah, not right now I have lots of time.

Fast forward a few years later and my interest was really in accelerating my salary. So I did some intelligent things like invest in myself. I managed to earn a couple of credentials which earned me an additional 20k. Simultaneously I tried to save as much as I could while living at home.

Method 1: Real Estate

Along the first couple of years of working, despite a big chunk of money going to the car — I saved up enough for a downpayment on a house with my soon-to-be wife.

It stressed the heck out of me, but we managed with our two incomes and a modest lifestyle to make the mortgage work. Like everyone who buys real estate we thought we overpaid. In 5 years, this investment was sold and we moved into our next phase of life parenthood in a different house out in the country.

We have made one additional move closer to a City and bought a rental property as well.

Real Estate over the 15 years we’ve owned and sold has performed incredibly well for us. Between appreciation, mortgage pay down, and the forced savings plan Real Estate has been the greatest contributing factor to our net worth.

Method 2: Company savings plans

As much as I despised much of my Corporate life, it has really been generous in terms of training and “free” money. early in Corporate life I pretty much ignored this part of my income.

Only halfway into my career did I pay more attention as the tax bracket I fell into almost forced me to maximize these savings plans. it was only then that I saw the power of someone else contributing and watching the snowball grow every year. If I could go back to my younger self, I would say start sooner and contribute more.

Method 3: Small business

Well, we’re still in the process with these entities that we own. I will count the rental property outside of this. A few years ago, we purchased an existing and started a new business. Both of these are held in a Corporate structure. I don’t know that it has yielded what we had hoped for, but we have learned a lot in a very short time.

Method 4: Life Insurance

Many years ago, we bought some participating whole life insurance. Again, I wish I bought more and bought more sooner. I can see how this will help us later on from a variety of perspectives.

Method 5: Stock market

So starting back in 2000 I was a day trader during University and experienced the highs and lows during the dot com meltdown. In the last 15 years, I would say we’ve dabbled a bit with different strategies. I tried riding waves and didn’t prosper as much as I would have liked given the time I spent on it. We have since farmed out this to Investment companies and robots.

Where we’ve experienced

Most losses: Speculation in stock markets, trying to time the market, and syndicate mortgages.

Most gains: Real Estate

Our conclusion so far, slow and steady wins the race, run the marathon trust the process.