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You Can’t Get Rich on a Salary!

It’s been the mantra of entrepreneurs for generations: “You can’t get rich on a salary.” Is it true? With scant exceptions, even top-paid execs, doctors, and lawyers make less than $1 million a year. And you can certainly grow rich earning six figures a year if you play your cards right. But what about the rest of us? If we aren’t interested in following one of a handful of professional tracks that lead to big paychecks, there are two options: Accept our income level and spend and invest wisely to protect the little money we earn or become an entrepreneur. The way I see it, we can become financially comfortable on a salary, but not rich.

What is “Rich”?

These days, I think far too many people mistake being “rich” with being financially secure. Certainly, to somebody who is broke, somebody with a $1,000 in their pocket will seem rich. And, as other bloggers and financial magazines sometimes document, ordinary Americans become millionaires everyday. These ordinary millionaires don’t earn seven figures (or even six figures) a year, they don’t inherit their money, nor are they business owners—they just play by the right personal finance rules. They’re millionaires, but are they “rich”? I don’t think so.

In fact, I’ll bet if you ask people who reach a net worth of over $1 million, many will tell you that they aren’t going to stop until they reach a net worth of $4 or $5 million. Even then, they won’t be “rich”. Financially secure? Sure. Upper-middle class? Yes. But “rich”? No.

Rich is having tens of millions, or billions. Like Bill Gates, Warren Buffet, or Sir Richard Branson. Rich is having your own island and a private jet. Rich is giving away more in charity every year than most people will ever have in the bank.

And the fact is, you can’t get that rich on a salary.

What Can You Do on a Salary?

Just because you work for a paycheck doesn’t mean you can’t take control of your financial future. In fact, if every salaried employee’s financial destiny were predetermined, there would be scant use for financial advice!

Working for a paycheck, you can control how that paycheck grows by:

  • Proving value to your employer,
  • negotiating your compensation,
  • investing in yourself (via training and education), and
  • managing your career track.

You can also maximize how much of your paycheck you keep by:

  • Living well below your means,
  • Getting out of and avoiding debt, and
  • Saving and investing regularly.

At the end of the day, however, you can only squeeze so much out of your chosen career field. Will it be enough to make you comfortable? Probably. Will it be enough to make you content? Hopefully. Will it ever make you “rich”? Unlikely.

Why Does it Matter?

Most of us don’t care if we ever get that rich. Most of us, myself included, will be just fine being comfortable and building a modest level of financial security. Still, it pays to steal a few tactics from the playbooks of the truly rich. A few of those tactics include:

  • Taking calculated risks,
  • Working for yourself,
  • Seeking opportunities, and
  • Understanding the value of time.

Incorporating some of these tactics of entrepreneurs and business leaders can only help us maximize our paychecks, but also may lead us to new earning opportunities outside work that will supplement our incomes and either increase our overall wealth or propel us to financial goals faster (such as early retirement).

In the coming weeks I’ll be writing more about how to pursue entrepreneurial activities on a part-time basis and how to supplement full-time entrepreneurship with a “day job” as well as the importance of risk in building wealth. In the meantime, do you agree that it’s impossible to grow rich on a salary? Please share your thoughts in a comment!

Published or updated on July 28, 2009

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About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.


We invite readers to respond with questions or comments. Comments may be held for moderation and will be published according to our comment policy. Comments are the opinions of their authors; they do not represent the views or opinions of Money Under 30.

  1. harvey navarro says:

    being Rich is being able to do what you want to do when you want to do it

  2. raidragon says:

    I agree on rich depend on the person….the problem is: I know a lot of “rich” person that have coal mine, oil, gold ,etc and they cbf buying private island or jet just because they can travel in 1st class and concentrate on doing other things except on how they gonna waste their money.

  3. Abhishek Goyal says:

    i am an INDIAN who sees future very unsecured due to having private sector job. actually in india if you are having a govt. sector job you are suppose to be a better than any thing else .

    One thing this article has given me Wisdom “i’ll be soon investing in myself”


    Abhishek Goyal

    Faridabad INDIA, Delhi NCR region

  4. Chris says:

    I’m dead broke and want to become well to do.

  5. Newton says:

    There are enough hard working poor MBA’s with “decent salaries” (myself included) while there are persons without even a high school education who operate their own business and live a good life to prove the point.

  6. Robert Teshaky says:

    The concept of this should be this way.
    Salary is for worker, the boss who pay salary should have more money to do so, so logic say the boss have more salary than worker.

    This is a micro and macro concept here, example, worker in company get monthly income less than what company own/earn. And there is another people who buy others company or merge them, that is tycoon type of rich, rare, but on top of all this small circle of worker salary and small company.

    Bear in mind that many company lost money and all worker add up may earn more than the boss have.
    In that way the strategist suggest use other people money to invest, if success, yours bonus, if not , the other guy lost.

    Same as listed company circumtances.

    so there is people work their time for company, company get investor money, top tier people give and take and control that investor money.

    I think the best way is ” get every sure % of profit from the every $ of salary you pay” this is the only sure rich way.
    The more salary you pay, the more you sure earn.
    Every investment main concern is “sure/ guarantee yield.”

    This happen in many thing, CD business, Michale jackson cd, Amazon e book, credit card business.Government income tax,
    hary potter book,…..and you see the wealth come from well risk management , example, Harry potter book, if the cost and sell price is 5 time, than every 1 book sold, 4 book if free of cost, make thing free of cost is a solid foundation of wealth castle.

  7. Robert Teshaky says:

    Getting rich by salary is related to how much the salary is, there are people who earn 100 k per per year on salary alone and some one earn 15 k per year.
    that is 10 time different,also, salary make a secure start up and less risky platform to implement strategies that work or lose on employer account.
    relatively, people with 10 time of salary seem faster 10 time in saving and have more capital to invest side line and also other value increase over time investment on some financial tools.

    It is advisible to get “enough capital” by high salary at begining but not for the whole life when have other more higher bottom line income, then invest right investment at much younger time of life that enjoy component interest that surely cause million at 25 years later say the growth rate is 27% per year, that make capital 2 fold in 4-5 years.

  8. Yusri says:

    I do agree that we will never be rich solely from our salary unless we are at the top of the organization hierarchy earning at least five figure salary per month and not many people can achieve that. Then again being rich is subjective. For me, being rich does not only encompass on materials things but more importantly our attitude and the feelings we have inside. No satisfaction if I have much money and at the same time being arrogant, ignorant, proud and all those bad habits inside me. Is this not so? Being rich is good if you know how to handle it (just like anything else in our daily lives!). To wrap up, its up to the individual to choose whether he/she wants to become rich or not. The choice is ours!

  9. Time to get back to reality says:

    How many people do you know that own their own island or have a private Jet???

    GET REAL.. This article was written by someone who is a DREAMER.

    You would not WANT to own a private island. The cost of maintaining this property would be a massive waste of resources.

    Being rich simply means you earn about 50% MORE than your expenses.

    If you pay $600 a month for rent + Food + car, etc. and you earn $1200 a month then congratulations YOU ARE RICH.

    Being POOR means you spend almost every dime you earn on just basic living expenses.

    STOP DREAMING and WAKE UP America.

  10. Dan says:

    I have a hard time agreeing with this article because being rich to me is all in the eye of the beholder.

    You don’t have to have a lot of money to feel and be rich to yourself…if what you want in life is achieved and you are living a happy and fulfilling life then I believe you have become rich and prosperous.

    Cutting the “rich” concept down to the amount in your bank account and “owning islands and jets” is a sad twist that America has put on the term.

  11. M.Wanzer says:

    I think that the term “rich” is extremely subjective, you hinted at that with your example about the broke person and the 1000 dollars. I do think one can become “rich” by working for someone else because of that very fact. One person may consider being rich something as small as having a huge house and a Mercedes, if that is ones definition of rich, that can be obtained by working in a field that will allow you to do that, you don’t even have to be an entrepreneur.
    Another person my consider being rich to mean having enough money to pay their bills, and maintain a lifestyle they deem comfortable, if their comfort level is not too high this too can be obtained by being an employee.

    I tend to think financial independence is a completely different thing from being rich. I think that entrepreneurship is the only way to be truly financially independent. I do not mean one has to completely work on their own, but I do think in order to be financially independent one must have multiple streams of income, not just limited to those that are gained through being an employee. Yes it is true, you can save and invest, but if your employer up and decides to fire you or lay you off, savings only last but so long before they run out; this is where I feel like other streams of income are vital.

    As long as one is solely an employee with no other means of gaining income they are at the mercy of their employer or the next employer; no matter how much they make I do not think that constitutes financial independence.

    Sorry for the long comment

  12. I think you bring up a very good point. Sadly most people are barely able to stay on top of their finances. Society is setting a sub standard bar for achievement to those who are able to pay their bills ontime. Working hard at a regular job to achieve financial security should be a only starting point, not a goal. But we must crawl before we can walk.

    -Dan Malone-

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