
In last week’s newsletter, I made the case why it’s better to get rich slowly rather than suddenly.
Put simply, putting in the work and the time to build wealth over years or decades gives you the skills required to make that wealth last.
At the end of the post, I teased my five-step plan I have been following for the past 5 years to build “FU” money slowly but surely.
Get a good job with flexibility
Live below your means and start investing
Start a side hustle, maintain your cost of living, and invest even more
Keep building the side hustle until it exceeds your 9–5 income (Financial Freedom)
Keep investing until you don’t even need the side hustle (FU money)

#1 Get a good job with flexibility
Notice I did not say a job that would “pay the most money possible.”
I have a graduate degree in finance & economics. When I was in grad school, I thought I wanted to work on Wall Street. Which is another way of saying I had no idea what I wanted to do with my life, but I wanted to be rich.
It didn’t work out that way, and I am grateful for that.
Instead of working 60-80 hours per week grinding away in the bowels of some big investment bank I:
Work 40 hours per week
Work from home
Have a “good” if not obscene salary
Fantastic benefits
Lots of personal time off when I need it
My entire life does not revolve around my day job. That flexibility is what allowed me the time to:
Start writing on Medium
Create this newsletter
Some people say “life is short,” but if you put yourself on a track to spend 40+ years working insane hours doing work you don’t really care about, “life is long”.
Flexibility > salary
#2 Live below your means and start investing
Here’s when you start winning with money:
When your income > expenses on a consistent basis.
At this phase of the game, there is one financial metric you should obsess over; your savings rate.
Savings rate= monthly savings ÷ monthly take-home pay.
If your monthly take-home pay is $5,000 and you save $1,000, you would have a 20% savings rate.
Anyone who is just getting serious about personal finance should write out the following sentence on a chalkboard, Bart Simpson style, so they never forget it:
The higher your savings rate, the faster you will build financial wealth.
There are only two variables that impact your savings rate.
How much money you make.
How much money you save.
That means there are only two actions you can take to increase your savings rate;
Reduce your spending while maintaining your current income.
Increase your income while maintaining your current spending.
Let’s start with reducing your spending.
First, you need to work big to small (no, cutting out coffee will not make you rich.) If you want to make a real dent in your cost of living, start with your big-3 expenses.
Housing
Transporation
Food
Admittedly making big changes to the big-3 means making major changes to your day-to-day life.
So, if you want a more realistic (but slower) path to lowering your cost of living, embrace “reverse lifestyle inflation,” where you treat all new money like it doesn’t exist.
Here is your detailed guide to reverse lifestyle inflation.
Once you start making more money than your spend, it’s time to start investing.
Take your monthly surplus, put some aside in cash for an emergency fund, pay down debt, or start investing in assets that will help build long-term wealth.
Stocks
Real estate
Bonds
Once you make investing a monthly routine, you are on the path to wealth, flexibility, and freedom.
#3—Start a side hustle, maintain your cost of living, and invest even more
The easiest way to supercharge your savings rate is to increase your income without spending more money.
For me, a side hustle has changed my financial life. It allowed me to:
Increase my income
Diversify my income
Make me less reliant on a paycheck
Teach me how to run a modern online business
Do work I love
A side hustle also helps you play financial defense.
If you can scale your side hustle to the point where it can cover your cost of living, then you are in a powerful financial position. If you ever lost your job, your side hustle could pick up the slack and give you flexibility and time to figure things out.
Start a side huslte doing something you love.
Why?
Despite the benefits of having a side hustle, it is really hard. If the only reason you start a side hustle is for the financial benefits, you may not be able to stick with it long enough to actually reap the benefits.
#4— Keep building the side hustle until it exceeds your 9–5 income (Financial Freedom)
In my book, I outline a simple definition of financial freedom:
Doing work you love without ever worrying about how you’ll pay the bills.
If you stick with your side hustle long enough, you may wake up one day to realize that your side hustle actually makes more money than your 9–5. If you’ve been focusing on saving and investing all your extra money along the way, you probably also have a nice financial cushion.
This is the point where big life-changing opportunities begin to open up. Such as leaving a 9–5 to make your living doing work you love and control.
#5—Keep investing until you don’t even need the side hustle (FU money)
Once you start making enough money doing work you love and control that can pay all your bills, never forget it is not a permanent state.
Even strong businesses eventually go bankrupt. There could come a time when you no longer make enough money doing work you love to pay your bills.
That’s why it’s so important that you continue saving and investing until you have true “FU money”—the point where work becomes optional because you have enough wealth to perpetually fund your lifestyle.
This is one of the reasons I still work a full-time job and run a business. It allows me to build up more financial wealth and increase my margin of error.
Given my personal financial struggles early in life, coupled with the fact that I have a job I like that provides flexibility, I won’t be taking MOAM full-time until I approach FU money.
You might feel differently. Maybe you have a higher appetite for career risk, or maybe you have a job you hate. These are good reasons to consider taking a side hustle full time sooner than later.
Just make sure no matter what work you do, whether it be a 9-5 or a business, you have enough room in your budget to allow you to continue investing. If you stop investing, you’ll never have FU money.
Can I ask a favor?
The Plutus Awards are like the Oscars of personal finance blogs.
They just opened their nominations, and if you have enjoyed this newsletter every week, I would really appreciate it if you could take 2 minutes and nominate Making of a Millionaire in the categories of financial independence and investing.
Also, there is a category for the best new personal finance book. If you have read The Financial Freedom Equation, I would really appreciate it if you nominate the book; here’s the link.
And here’s the link to the nominations page.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.