The Path to Wealth in 2022

Building wealth is not as complicated as it seems. It’s a lot of hard work, and you may need to make sacrifices, but I believe wealth is attainable for us all.

There are Three key steps to building the foundation of wealth:

  1. Get out of bad debt
  2. Save some cash for short term emergencies
  3. Invest into assets

Thats it. That’s the very basics of having a strong financial life. To do this you only need to do one thing. Spend less than you earn.

If I were to start over, here is what I would do:

Learn the very basics of investing

First step would be to start investing $5 per week into any asset that I personally find has a long term potential for gains. I wouldn’t take much risk with this initial small sum, however any investment can work. The point here is to start making beginner mistakes and to start understanding your own personal psychology, risk tolerance, and habits when it comes to investing.

I currently know that I have a very high risk tolerance and I am not swayed heavily by large up’s and down’s in the market. However, when I first started investing this was far from the case.

If one of my investments lost a few dollars my heart would pound. I didn’t know how to think long term and I was taking much riskier bets than I was comfortable with in hindsight. That’s the benefit of starting small, you can figure out how you like to invest and your personal investing skillset. As I learned and understood myself I was able to change this habit and now I invest quite risky compared to most and can handle that stress well.

I would do this $5 per week investing before paying off any debt or before building an emergency fund.

There are a few reasons I believe in this.

First off, it allows you to understand how to invest, where to invest, how to buy assets and how to build wealth. You get to see and feel exactly what it’s like to make money while you sleep and lose money while you sleep.

$5 per week will not make you rich. But it will allow you to begin building the habit of consistent, automated investing. It will also help you learn to manage market volatility and the emotions that come with losing and gaining money each and every day the market is open.

Many people think they need to make a lot of money to invest. They think they need to wait until they’re out of debt and rich to buy stocks. Pro tip, people get rich by investing, they don’t wait to get rich and then invest. With companies like Robinhood you can now buy as little as $1 in most stocks.

When the market dips 2, 5, 10, 20% and you have $50 invested it is much easier to handle losing $10 over the course of a month than having $10,000 invested and losing $2000 over the course of a month.

Many people think they can act rational, but when the time comes and your money is melting in your account, it’s much harder to actually do what you’re ‘supposed to.’ There’s a reason most investors lose money in the stock market, they can’t keep their emotions in check. Greed and fear are both negative attributes with investing.

Learning the lessons of consistency and controlling your emotions is much better learned when you are still at the beginning of your investing journey and don’t have much to lose.

Making big mistakes with a little money ends up being a little mistake. Making big mistakes with a lot of money can be life changing (in the worst way).

$5 per week is enough to learn these lessons and build a little pile of equities while you’re paying off debt and building an emergency savings fund.

It is also such a small enough dollar amount that anybody can do it!

This is also a good time to read a book, or dive deep into the internet and learn the basics. Things like index funds are typically a great place to start.

You may want to avoid risky investments like individual stocks, or crypto as a first investment but that is your autonomous choice.

Photo by Karolina Grabowska on

Emergency/Rainy Day Fund:

The next step that I would take is save one months rent worth of cash. That is typically somewhere between $500 and $2500 dollars.

The reason to save this money is for a small safety net. This money is used only if a catastrophe happens. If you need a flight to a funeral, if your vehicle breaks and you need some cash to repair it, or if you need to pay a months worth of rent because you lost your job. Hopefully none of this happens but this money serves that purpose.

The point is to get your financial life back together. There is a good chance you are in this mess because you don’t know how to spend less than you make. If you can’t save and not spend $1000, how on earth could you save up $1 million dollars?

If you have more than one months rent already saved, I would personally use that extra money towards debt. If using your extra money to pay off debt is too intimidating and you won’t do it the other option is to save your full emergency fund first (about 3-6 months expenses) but remember you will be paying interest on your debt during this time.

Each day you don’t pay off your debt it is costing you more and more money. It will feel good to pay off that debt and it will psychologically make you feel like you are truly committed to this goal. To be successful financially many people need to dive in head first. This won’t be comfortable, it will be a massive life change.

The comfort will come when you are sitting on the beach with a million dollars in your bank account while your friends are complaining to you about their jobs and wish they were “as lucky as you are”.

Many people know what to do, they just don’t. Many people don’t know what to do, and they don’t want to learn.

What is your reasoning? Once you find your reason focus on how to solve that problem.

For some it’s lack of education, some it’s lack of discipline, and some it’s lack of knowing your own psychology and habits.

Photo by RODNAE Productions on


After investing $5 per week, saving about $1000 cash, I would pay off debt.

For most people, the highest interest rate debt is credit cards. So, if I had payments to make on 5 credit cards, I would start with the lowest payment and work your way up.

For example, if I have 5 credit cards and owe $50, $250, $500, $1000, and $5000, on each card respectively, I’d pay them off in that order.

Start with the smallest one and work your way up. I’d also recommend you don’t use credit cards while you’re paying off debt. Get rid of them, if you want to keep them, then just use a single credit card, and use the one that has the highest amount of debt on it. It will make you think twice to add to your $5000 credit card than to your $50 card.

That’s what I would do, and it’s also what I’ve recommended my friends do and it has worked for them.

Then work your way toward other debt.

Student loans and mortgages should typically be done last. I don’t think I would payoff my mortgage early unless I wanted extra peace of mind to know I can relax and have a paid off home, cars, and no debt. That would honestly feel very good even if the “math didn’t make sense”.

If you owe more than a years salary in student loans, look to refinance to as low of an interest rate as possible. Start chipping away at them!

Mortgages can typically be ignored like I said earlier and you can just pay your monthly payment as usual, I personally don’t see anything wrong with a mortgage unless most of your income is going toward your home. IF that is the case, you may need to get roommates or find a way to pay less each month. Even selling your home and downgrading could be the only option if you are in enough debt.

There are many ways to do this and I have another blog that covers this topic:

After saving $5 per week, saving $1000 cash, and paying off debt; the next step is to build some more cash savings. I’d start with about 3 months expenses.

If you already did this before paying off debt you of course do not repeat this step.

3 months worth of mortgage, food, and student loan payments, etc.

This is just to have a large cushion to feel and be financially safe. This isn’t enough money to live the life of your dreams or “ball out” but it will feel very good to know if you lose your job your life won’t be over. If a surprise $10,000 payment pops up, you should be OK.

This step is very simple. Save up some cash for emergencies. The biggest emergency most people have is losing their jobs. Have a backup plan for this with a little cash in a savings account.

Most people lose their jobs when the economy is bad. When the economy is bad, the stock market crashes. When the stock market crashes your stocks lose a lot of their value. Don’t invest your emergency fund in the stock market because you will have to end up selling your stocks in order to pay you bills. You will have to pay taxes on those gains and also your “10k” emergency fund could go down to “5k” if the market crashes hard enough.

This is your choice though. If you don’t have an emergency for a long time your money could still be worth more than the initial investment.

I am currently using stable coins as a portion of our emergency fund, which is a interest rate of 8% on our dollars.

Photo by MayoFi on

The real investing begins

I would now start to save a minimum 10% of my income.

This is where you are actually building wealth. When I say save, I mean invest. This step either requires research or talking to a professional. Fun fact, spending 10 minutes googling a stock will not tell you if it’s a good investment or not.

Would you rather take very high risk bets and potentially never make any money, or even lose money through investing, or would you take lower risk bets and have a much greater chance of making some money?

That is the very basic risk/return analysis of investing, and you have to know where you stand in that cross section.

Are you going to YOLO on doge coin? Are you going to buy the S&P index fund? Or will you buy government bonds? These all have very different risk/return analysis.

As you can tell by me writing this blog, I like to do lots of research and take higher risks.

With 10% of your income you probably can’t go wrong with investing it in an index fund like SPY or VOO (talk to a professional), for most people that is what is likely best, or at least that is what I do with 10% of our income. To be clear, 10% is not enough to invest for most people. 10% likely won’t allow your to retire early or have a bougie retirement experience.

We actually do personally invest about 10% of our income into index funds through Roth IRAs. Our additional investments then go into progressively risker investments like Bitcoin or individual stocks.

Each person is different. Speaking to a financial advisor and planning for your specific situation is best.

If you want to invest more than 10%, you can get a little more wild and start dipping into other investments or you can put a higher percentage into the these index funds. There is no right or wrong answer. There is just risk/return that you make for yourself and your goals.

Before I invest more than 10% of our income, I use any extra money to pay off our other debt. This really is a personal choice, many people will choose not to do this, especially if they start convincing themselves that “that math doesn’t work.” It’s really important to just understand what kind of person you are.

I would not pay off a mortgage but instead just add more to the stock market. I would however pay off a vehicle or other smaller chunks of debt, but that’s just me.

Will you actually save more than 10% of your income? Will you actually save the extra money that you “save” from not paying off your debt?

Photo by Andre Furtado on

If you’re going to not pay off debt, and then spend the extra money, that’s not a good financial decision. You can do that of course, but just realize you’re working against the ‘debt-river’ and the rivers current is pushing you backwards.

Some people really should aim for $0 in debt, never touch a credit card, and never go into debt again. Other’s can manage the world of debt and can control themselves with credit cards.

Once you are educated on finances it is up to you to make your own choices. Remember the hard work it took to get out of debt. Think about how you can become a millionaire in a few decades by investing properly and taking slightly less risk. Is the potential of getting rich in 5 years worth the risk of never getting wealthy?

You may even want to talk to a financial advisor a few times a year just to make sure you are on the right path.

It’s really hard to go wrong having 0 debt and saving 20% + of your income in index funds. Historically that has worked quite well. But this is not what I do, and I do not recommend this is what you do. Each persons goals, risk tolerance, and situation is vastly different. There is no 1 size fits all recommendation.

It’s really easy to get into trouble using debt to make more money, and investing in high-risk/high-reward assets. It’s quite difficult to run into major money problems with zero debt, a hefty emergency fund, and most of your money well diversified in index funds.

We currently have $0 debt (not even our phones) and we plan to only have debt for mortgages in the future. Our plans could change, they do all the time. But for us, leveraging debt to retire a few years sooner just does not make any financial sense considering the significant added risk.

You choose your own path. You can become financially free and live a wealthy life. Nobody can make this choice for you. Good luck!

Educate yourself!

🔎Disclaimer🔎 All content in this blog is for entertainment purposes only. I am not a professional financial advisor and my statements are not to be taken as instructions or directions. In no event will I be liable for any losses or damages arising from the use of content from any of my platforms, including, but not limited to YouTube, Blog, or any other social media. I reserve the right to change my opinions and entertainment content at any time. Please be sure to do your own due diligence!

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Published by Christal

I write to share my experience of going from $0 to a millionaire and what I am learning along the way. Working toward that goal one day at a time and sharing the tips and tricks I'm trying.

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