How to Build Wealth on a Modest Income

In a world where rising costs often outpace wage growth, the idea of building wealth on a modest income may seem out of reach. But according to financial experts, it’s not only possible; it’s happening every day.

Delories Jones, senior vice president of sales and marketing at JN Fund Managers, says whether you’re earning just above minimum wage or bringing home a steady but modest pay cheque, there are proven strategies that can help transform limited earnings into long-term financial stability and wealth.

“Many people believe you need a high income to build wealth, but the truth is, wealth is more about discipline and consistency than it is about how much you earn,” said Mrs Jones.

She pointed out individuals who succeed financially often begin by redefining what wealth means to them by shifting focus from flashy purchases to financial security and freedom. “Wealth is about ownership of your time, your choices, and your future,” she explained.

She  stressed that the first step is learning to live within your means. That means creating a realistic budget that prioritises essentials, trims unnecessary spending, and sets aside money for future goals.

“You’d be surprised how many people earning a reasonable salary per month can’t account for where their money goes,” said Mrs Jones. “Tracking spending is where real change starts.”

Popular budgeting methods such as the 50/30/20 rule—allocating 50 per cent  of income to needs, 30 per cent  to wants, and 20 per cent to savings or debt repayment, offers simple frameworks for managing money effectively.

Mrs Jones advised that one key principle of wealth building is to pay yourself first. Instead of saving whatever is left at the end of the month, individuals are encouraged to set aside a portion of their income as soon as they are paid— no matter how small.

Automating transfers to a high-yield savings or investment account can help reinforce the habit. She recommended four other strategies:

Tackle High-Interest Debt

Debt is one of the biggest barriers to wealth creation, particularly on a modest income. She recommends focusing on paying down high-interest debts such as credit cards and payday loans before investing heavily.

Methods like the debt snowball where smaller debts are paid off first for momentum or the debt avalanche, which prioritises high-interest balances, are effective approaches to achieve freedom from debt faster.

Invest Early, Even if It’s Small

“You don’t have to wait until you’re ‘rich’ to invest,” said Mrs Jones. “In fact, the earlier you start, the better.”

She said with the power of compound interest, even small investments can grow significantly over time. Apps and platforms now allow people to start investing with as little as $1,000, making it more accessible than ever.

For long-term goals like retirement, tax-advantaged accounts or their equivalents offer valuable benefits.

Boost Income Creatively

While budgeting and saving are critical, increasing income through side hustles, part-time businesses, or skill development can accelerate wealth-building, she suggested.

“Even an extra $500 a month can make a huge difference if it’s saved or invested wisely,” she noted.

Online freelancing, tutoring, selling crafts, and monetising hobbies are popular ways people with limited time and money are creating additional income streams, she said.

Wealth is Possible—One Step at a Time

Despite the challenges, she said persons can build wealth on modest incomes by being consistent, disciplined, and following a clear financial plan.

“You don’t have to make six figures to build wealth,” she pointed out. “You just have to make intentional decisions, over and over, until they start paying off.”