Growing up poor shapes your entire worldview, especially regarding money. As a child, I often went to bed hungry, wore hand-me-downs, and watched my parents struggle to make ends meet. The idea of wealth seemed like a distant dream reserved for people born into different circumstances.
But today, I’m writing this from a place of financial independence, having become a millionaire. My journey from poverty to prosperity wasn’t easy or quick; it took a long time and a lot of work and study, but it was possible.
In this article, I’ll share the five key steps that helped me build wealth, hoping they might inspire and guide you on your path to financial freedom.
1. Changed My Mindset
The first and most crucial step in my journey was transforming my thoughts about money. Growing up poor, I had internalized beliefs like “Money is scarce” and “Only people born into wealth can be rich.” These thoughts held me back in my early adulthood, creating a self-fulfilling prophecy of financial struggle. I had to find a way out; I didn’t want to live the rest of my life hand to mouth.
Changing my mindset began with conscious self-reflection. I started questioning where my beliefs about money came from and whether they served me. I realized that many of my attitudes were defense mechanisms, ways to cope with the scarcity I’d experienced.
To shift my perspective, I immersed myself in books about abundance and financial success. I started with classics like Napoleon Hill’s “Think and Grow Rich” and Robert Kiyosaki’s “Rich Dad Poor Dad.” These books opened my eyes to the possibility that I could create wealth, regardless of my background.
I started by writing down all the goals I wanted in every area of my life. One potent exercise I practiced was visualization. As I fell asleep each day, I spent a few minutes imagining myself financially successful, having achieved all my goals and living the life I wanted, feeling the emotions of security and freedom. This helped rewire my brain to see wealth as attainable and positive.
Gradually, I began to view money not as something to fear or avoid but as a tool for creating opportunities and improving my life and my family’s. This mindset shift was the foundation for all the practical steps that followed. A growth mindset is the first step to building the life you want; a scarcity mindset will keep you trapped in your current circumstances.
2. Prioritized Financial Education
Once I believed that building wealth was possible, I realized I needed to learn how. Growing up, financial literacy wasn’t part of my education at home or school. I felt like I was starting from scratch, but I was determined to learn.
I began by focusing on filling my bookshelf with the best books on personal finance, wealth building, business, and investing. The bookstore became my second home, where I found, bought, and studied books on personal finance. This was one of the best investments I ever made.
One concept that was particularly eye-opening for me was compound interest and compounding gains. I still vividly recall the moment I understood how my money could grow exponentially over time. It was like discovering a superpower I never knew I had. So, I knew at a young age I had to start building my capital.
As my knowledge grew, so did my confidence in making financial decisions. I learned about investing, tax strategies, and retirement planning. Each new piece of information felt like a tool I was adding to my financial toolkit.
For those starting their financial education journey, I highly recommend these personal finance books through this link, which provide clear explanations of financial concepts, and YouTube channels like “The Dave Ramsey Show” for engaging, real-world applications of economic principles.
3. Reduced and Eliminated Debt
I was drowning in debt when I started my journey to financial independence. Credit card bills, car loans, and my wife’s student loans loomed over me, eating away at my peace of mind and paycheck.
I decided to tackle my debt head-on using the debt snowball method. I listed all my debts, focusing on paying off the smallest debts first while making minimum payments on the others. It was a slow process, but seeing some balances eliminated month by month motivated me.
To accelerate my debt payoff, I looked for ways to drastically reduce my expenses. I moved to a smaller apartment, started cooking all my meals at home, and found free or low-cost alternatives for entertainment. Every extra dollar went towards my debt.
One of the most complex parts was avoiding new debt while paying off the old. I cut up my credit cards and committed to a cash-only lifestyle for non-essential purchases. It wasn’t always easy, but it forced me to confront my spending habits and distinguish between needs and wants.
After years of disciplined effort, I made the final payment on my last debt. The feeling of freedom was indescribable. Without the burden of monthly debt payments, I could finally start building real wealth.
4. Increased My Income and Saved Aggressively
With my debts cleared, I focused on increasing my income and saving as much as possible. I knew that to build wealth; I needed to widen the gap between what I earned and what I spent.
To boost my income, I climbed the ladder in my career to get to a higher management level with a higher salary, stock options, and bonuses. This higher income allowed me to speed up my savings and investing to build my portfolio quickly.
I also started my website later. While it didn’t make me rich overnight, it provided an additional income stream and taught me valuable lessons about entrepreneurship.
As my income grew, I maintained my frugal lifestyle while paying off debt. I set an ambitious goal to save 20% of my income. To achieve this, I automated my savings, setting up direct deposits from my paycheck to savings and investment accounts.
Building an emergency fund was a top priority. Growing up poor, I saw how unexpected expenses could derail lives. Having saved up six months of living expenses provided a sense of security I’d never known.
5. Invested for Long-Term Growth
With my debts paid off and a solid savings habit in place, I was ready to start investing for the future. I started by maxing out my contributions to my employer-sponsored 401(k), taking full advantage of the company match – it was essentially free money. This is the 100% return many employees are missing.
For my investments, I decided to focus on index funds. After researching various investment strategies, I was convinced by the evidence that, over the long term, these funds outperform most actively managed funds.
I started as an investor and later evolved into a trader because I didn’t feel comfortable having my portfolio always exposed to stock market risk. This would be a good choice in 2008 as the market gave back all the gains from 1997 on, and I would be in cash or trading small positions, avoiding the meltdown completely.
After retiring from my job at a young age, I moved my 401k into a traditional IRA and set up. The idea of tax-free growth was highly appealing, especially considering my belief that I’d be in a higher tax bracket now.
As I became more comfortable investing, I also got lucky in real estate by selling two personal residences I owned for six-figure profits back to back and moving to new cities in 2018 and 2022.
Throughout my investment journey, I’ve stayed focused on the long term. Market fluctuations don’t faze me because wealth-building is a marathon, not a sprint. I’ve seen firsthand how even small, consistent investments can grow substantially over time, thanks to the power of compounding gains.
Conclusion
My journey from poverty to financial independence wasn’t always smooth, but each step built upon the last, creating a solid foundation for wealth. Changing my mindset opened me up to new possibilities. Financial education gave me the tools to make informed decisions. I became debt-free, freeing up resources for saving and investing.
Increasing my income and savings aggressively accelerated my progress. Investing in the long term has allowed my wealth to grow beyond what I once thought possible.
If there’s one thing I want you to take away from my story, it’s this: no matter where you start, building wealth is possible. It requires patience, discipline, and a willingness to learn and adapt. But with persistence and the right strategies, you can transform your financial future.
Your past doesn’t define you—your actions today shape your tomorrow. Take that first step, no matter how small, and start building your path to wealth today.