The GUIDE to Getting Rich on a salary

A systematic sane plan that you can apply no matter how much you make.

Wealth simply put is a measure of how long you'll survive if you quit your job today.

This is not a get rich quick guide. If you follow this, you will be financially free in a few ,months or years

It is important to develop practices and habbits that will ensure lasting wealth generation

Before we start, it is extremely important to understand a few concepts of Finance namely the types of income. Broadly classified, there are two types of incomes: Active and Passive. It is very important that you understand what these are and which one is more preferable.

Active Income

Active income is the income that you generate in exchange for your time. A job is active income since you exchange your time for money. You put in 8 hours of time in a job and in exchange you get some money. If you stop going to office, or doing work, you will lose this money. Working as a freelancer is also passive income since you are exchanging time for money.

Active Income is good, but should be converted into passive income generating assets as quickly as possible. Active Income is temporary and highly volatile, depending on your performance, time and conditions beyond your control sometimes (recession)

Eg: Salary, Freelance Income, Consultancy Services, Running a shop,etc

Passive Income

Passive Income is income  that is not dependant on the amount of time you put in. Income from business is passive (but only if you don’t work at the business). Income from stocks and investments is passive as the returns are not directly proportional to your time. Similarly, income from royalties from books, patents, etc is passive.

This is not to say that no effort is required to set up passive income, just that the income is not directly proportional to time.  You might have to do a lot of work to write the book and even make effort to market it, but you donot have to put in work per copy sold.

Eg: Stock Dividends, Interest Payout, Rental Income from Real Estate, Royalties on books, patents, Business Dividend etc.

Financial Freedom is achieved when your passive income exceeds your expenses.

Your ultimate goal in the money game is to ensure that your passive income is greater than your expenses.

PassiveIncome=Expenses for financial freedom to happen.

Your first goal to getting rich is to maximize your passive income. You can do this by starting a business, putting money into investments such as stocks, mutual funds, buying real estate for the purpose of earning rental income, writing books, create blogs, videos or online courses etc.
If you working in a job and have a supply of income, the first step should be to convert your salary into passive income through investments/savings.

We highly recommend reading this book to understand how passive income works

Step 1: Save First, Spend Later


It is imperative that you save more money at the end of each month by minimizing your expenses. To do this, calculate your expenses that are absolutely necessary such as rent, EMIs, Medical Expenses, etc.

You should arrive at a figure that is hopefully lower than your salary. Let’s say your expenses are E

Now calculate what remains after the absolutely essential expenses. This is the money that you will save at the very beginning of each month/week.

This is the money that you MUST save at the beginning of each month.

Read our detailed article on how to save more money here.


Whatever remains must be saved. It is imperative that you do this with complete discipline and put this money away. Donot touch this money, its money that will genearte more money for you.

Initially Start by saving this to a seperate account, or putting it into Cash Deposits. If you are starting, we recommend that you put this into a liquid fund so that you have easy access to the money, while at the same time, it is in an account that you can’t easily touch.

Now you might wonder what to do in case there is an emergency. Well, this is where you can use credit cards smartly. Keep a credit card with you and only use it on emergency expenses.

Read our article here on how you can use Credit Cards to enhance wealth.


Once you have saved this money away, see what extra expenses you’re having to make. This is where credit cards come in handy. They allow you to tackle unaccounted for expenses while at the same time, allowing you to take care of an emergency expenses.


After this, work in minimizing Expenses that you encounter. Reduce the netflix subscription, get a cheaper appartment. Now we recommend cutting down on expenses that you can do away with. Donot reduce expenses that help you or your family members grow or stay healthy such as gym, school. Do reduce expenses that don’t such as clubbing, vacations,etc

Step 2: Invest saved money

The truth is Fixed Deposits provide much lower interest rates than many other investment vehicles such as mutual funds, stocks, P2P Lending, Debt Funds etc. We recommend that you invest your money into these investment vehicles for higher returns.

There is nothing wrong with Cash Deposits if you are in a country that has high rates of interest, but if you are not, you might have to look further.

Here are some investment vehicles that we recommend and how you can make money from them.

Stocks and Equity

Stocks provide both capital appreciation and dividend to investors and provide the highest possible returns of most investment instruments. There is also significant risk in investment especially if you don’t understand what you are doing.

If you take some time to learn about how to invest in stocks, they’ll provide you much higher returns than other vehicles.  A great book to learn how to invest in stocks is One up the wall street by Peter Lynch


Peer to Peer Lending

Peer to peer lending is a relatively new concept in the world of finance. Peer to peer investments are a way of investing into debt. However, you do this directly and not through another entity as is the case with debt funds.

P2P lending typically offers  much higher rates of interest than traditional investment vehicles such as Fixed Deposits, Debt Funds and even Equity funds. Typically, they offer at least 3-4 times the interest of Cash Deposits.

What’s more, the money is not blocked off for a couple of years. You receive timely returns through EMIs on your investment and you can use these returns to generate more investments.

You can, easily create a loop for this where you invest and reinvest your money for a few months and then build a system for making constant passive income via P2P Lending.

The funds are safe from market risks, although there is always the risk of default on the loan. Most P2P lending agencies conduct thorough background and credit checks on borrowers and have debt recover agencies that kick into action if there is default

Mutual Funds

Mutual Funds do offer higher rates of return than most saving bank accounts and can also offer forms of tax security through long term investments. We donot recommend mutual funds as an investment option since they typically offer lower returns than the other two and offer very little control or learning experiences to you as an investor.

Debt funds are a good relatively safe way to invest money in the long term. They’re safe from market volatility, but can be affected by defaults on debt, change in interest rates etc.

Cash Deposits

Cash Deposits/ Fixed deposits typically offer very low interest rates compared to most of the other options. However, they’re a good sure way to keep your money safe. As long as the bank doesn’t go bust, your deposits are certain to stay safe.

However, this is our least preferred option as the interest rates are usually very low.  There are however certain advantages to Fixed Deposits: they can offer decent sure interest payouts thus increasing your passive income. Most of the other instruments are subject to risks, but deposits can usually be left alone with a certain sense of security.

Real Estate

Real Estate is an incredible form of investment in that it offers both capital gains and dividends. You can earn rental income from your property in addition to having the option to sell it off in the future. Real Estate typically requires a large investment, but if you have the money, you can always consider taking a loan to buy a house or a shop.

Chances are that a huge part of the EMI for the loan can be offset by the rental income. This is still for brave risk takers, but you can use money from the other sources of investments and put it into real estate.

If you get in on a project early, you can avoid monthly payoffs until the project is ready and can also sell and make a profit on the investment without having to pay off the amount

Step 3: Increase your sources of income

Once you have ascertained that you are utilizing your money as effectively as possible, it is time to increase your means. Remember all the sacrifices you had to make to get here?

Its time you increase your quality of  life a bit. The dividends you are getting can be partially reinvested and should partially support your desires.

You probably aren’t making enough to buy that Ferrari, but you should be generating enough to take a trip once in a while. For everything else, look at increasing your income.



Freelancing is one of the best ways to get some extra money each month. Some job areas lend themselves to freelancing, while others don’t. Programmers can easily freelance if they try a little bit, so can designers and writers. People with technical skills can easily find opportunities online. Even if your skillset doesn’t allow you to freelance, you can expand your skillsets in the area that can allow scope for freelancing.

There are many online courses in various fields: Programming, Design, Music Production, Content Writing, Photography. Spend a little money on developing your skillsets.

Second Job

If freelancing isn’t your thing or you donot have or want to gain the skills that you can trade, you can consider getting a second job. The second job would not only increase your income signficantly but also increase your skillsets and experience. If you can find a sales job such as network marketing, consider taking it just for the learning experience.

You will have to work harder than you are right now, but the extra money won’t hurt.

Small Business

Yes, the scary little word that will knock the socks out of every salaried employee in the world. Businesses can help you expand your means by only putting in enough work required to set it up. Running a business will also allow you to increase and leverage your skills better. You donot have to quit your job to start a business. It can be anything from a small dance studio to an online blog.

How will you find enough time to start a business? Simple, by hiring people to do the work. There are costs involved, but unless you’re living in absolute poverty, you can easily save up for a few months and then use that money to start a business.

Step 4: Evaluate and Repeat

It is very important that you evaluate your results and status every 2-3 months. See if you are on the path towards generating more passive income. If not you either need to increase your income or reduce your expenses.

At some point you will have reached the magic number:


This is the  point where you have stopped working for money. At this point, you should be able to just quite your job and start a real business. There’s nothing wrong with continuing with a job or getting a new one if you donot want to start a business. Remember that at this point you have become financially free and are no longer dependant on money.

We have a lot more articles on this site about generating money, investments, businesses that will help you speed up the process.