In late 2017, I started averaging an extra $4,000 per month. This was money on top of my regular income, so it wasn’t going to rent or eating out. I used some of this to pay my next year’s rent, and then threw the rest in my savings account.

Knock on wood, the money hasn’t dried up. So, in today’s article I want to share a realistic look at what growing your income is actually like.

It Costs Nothing To “Ball Out”

$50,000 in disposable income is enough to lease an entry-level Lamborghini all year, buy designer clothes or a starter watch, and take one or two nice vacations.

Case in point, a lot of “millionaire lifestyle” guys spend less than this.

If you’re living in Airbnb rentals, you’re spending nothing on housing (a Vegas penthouse costs $100/night), and whatever else you spend money on is maybe another $20,000 – $40,000. You’re making (and spending) $50,000 – $70,000 a year, a far-cry from most massive revenue claims.

Also, that’s if you actually pay for any of it.

(Most “Instagram Rich” Guys Try Passing Off Other People’s Stuff As Their Own)

If you aren’t saving anything, don’t have kids, and are comfortable working well into retirement age, you’ll probably have some fun. For a while…

In terms of actual wealth, this lifestyle puts you in the “comfortably poor” zone.

You make enough to buy nice toys or show-off on Instagram, but you’re still forced to work for a living.

What Most People Picture As “Rich” Is Actually Middle Class

The middle class income spectrum runs all the way up to $300,000 per year.

On the higher end are people like bankers, dentists, small business owners, certain sales professionals, etc.

These are people who make pretty good money, but (again) work for a living. At $300,000 a year, you’ve still got a mortgage and there’s a lot of stuff you simply cannot buy.

Likewise, I think there’s a lot of insecurity in the higher echelons of being middle class.

This is where a lot of people go into debt to prove they’ve “made it,” or get into a “keeping up with the Jones” mentality.

Going back to the point about balling out, if you have the money to show-off, don’t. You might as well save or reinvest it. This way you can cash out early and retire while your peers are leasing cars or buying a second home on credit.

The Stock Market (Probably) Won’t Make You Rich

(10% Annual Returns – In A Good Year – Means You’re Making $100 Per $1,000 Invested)

It’s no secret that I’ve invested most of my money into the stock market (plus stashed some side money for real estate). By March 2019, I should have about $50,000 in assets.

That’s a lot of money to deposit in one year.

But, here’s the kicker.

Of that money, I’ll get less than $1,500 in annual dividend income. That’s not enough to cover a month’s expenses.

Compounded over time, the money adds up (at $50,000 a year, I should have about $1 million in revenue producing assets by age 35). But, you still need to deposit an awful lot.

Unless you hit the jackpot (like buying $10 BitCoin), stocks and investing are a fairly poor path to wealth. Even if you’re operating on Gordon Gecko levels, pulling 15% – 20% annual returns, you’re still not making much unless you’ve got a massive bankroll.

Two personal examples:

Earlier in the year, BitCoin went wild. Prices were swinging between $5,000 and $10,000, and when this happened I created a whole trading strategy.

On paper, I’d trade my way to $100,000 in BitCoin by the year’s end. And for a while, it went pretty well.

Then prices settled, killing my plan.

And while this idea was profitable, it didn’t have the best ROI. Honestly, I could have sunk that time into another site or writing project, and it would have paid more.

The second example is Peer-To-Peer Lending.

This is something I looked into when my disposable income grew, and the returns weren’t worth it. I think I made more betting on a football game than I would have made in an entire year of lending money.

For a livable passive (dividend) income, you need about $4 million. And that’s if the economy is good.

The easiest way to come up with this is by focusing on your own active income. Websites, books, having a physical side-business, or starting a company are all ways to build wealth faster than stocks.

Plus, you can always dump your profits into the market, supercharging your returns.

Closing Thoughts

Today’s article probably sounds dour, but I wanted to paint a realistic picture of what growing your wealth is actually like.

A lot of people, especially on the Internet, imagine that making $100,000 – $300,000/year (pre-tax total) means you’re balling out with Jay-Z or partying at the Rothschild Manor. If anything, this is the “peddle-to-the-metal” zone. And you definitely don’t want to be stuck here. It’s an area with just enough comfort and competitiveness to keep most people trapped.

It’s certainly nice to get there, but even better to leave.