This guest post is by Pejman Ghadimi. Pejman is the founder of, an author, an entrepreneur and a leadership consultant.
Many will argue that fortunes can be made overnight; while that may hold very true in some cases, the majority of those who have made it will tell you it did indeed take a great deal of time coupled with some correct financial choices. For me, wealth did not come solely from entrepreneurship or financial risk, but rather it came as a result of diversifying my investments all while growing my equity leverage and identifying the right opportunities early on.
I made my first million before the age of 27. It took me close to 14 years of hard work and trial and error to get there. But I did get there nonetheless, and I can tell you that it was quite a learning experience. I not only learned a lot about my capacity and tolerance for risk, but also quite a bit about financial systems and loopholes that exist. I want to share with you today seven rules that you can follow to making sure you also get on the right path to slow, but sustainable, wealth.
Rule 1: Think net instead of gross. Many get consumed with the continuous desire to grow their gross income but often forget to leverage their net income. Increasing your net income by lowering your taxes is no different than raising your gross income. Make sure to reassess your net situation often by leveraging your write-offs early on.
Rule 2: Embrace economic pressure. There will be many times in the next 10 years where you will identify an opportunity to invest or be part of something that requires you to be uncomfortable in your financial position for a set period of time. Just keep in mind that risk equals reward, and without any type of financial risk, you are doomed to stay a prisoner of the lower interest rates set by banks.
Rule 3: Create residual income streams. If you are bound to only receive one form of income, it is most likely you are living paycheck to paycheck and very unlikely that you are actually saving a large chunk of that paycheck. One of the main reasons people struggle with savings is because they are attempting to save money they otherwise count on to live and as a result find themselves in a position that forces them to spend it, even if they were lucky enough to save it for a short while. Most survive of their main income and grow with throughresidual side income. Examples of side income may include rental income, dividends, affiliate marketing, and side businesses.
Rule 4: Turn liabilities into assets. While it is true that most of the spending an ordinary family makes is buying more liabilities, you can differentiate yourself by investing in assets instead. Equity is key when making purchases. Let’s use the example of a car since we all know most cars are liabilities. If you buy a new car for $26,000, then it is likely that it will lose the majority of its value in the first three years, but will eventually depreciate to about 20 percent of its original value by the time you actually pay off your loan (assuming a five-year loan). You therefore paid $26,000 and used your car until it was worth close to nothing. Instead of buying a liability, think of how you can turn the same item into an asset. The same $26,000 car is available used and has taken the majority of its depreciation in the first three years, and therefore can be purchased for 50 percent off that price. In many cases, it can be purchased with a similar warranty as a new one, and very low miles. Since you are finding a car with much lower miles than it should have for 50 percent of its original value, you simply can use the car until it reaches a normal mileage point and then sell it within two years at a minimal loss (usually less than 10 percent from your buying price). As many of you may not be familiar with the car market, keep in mind that great low mileage examples of your favorite cars are not hard to come by and can be found on sites like, and A little patience and due diligence can save you a tremendous amount of money on this necessary but depreciating asset. Here is a link to a book that explains this system in detail.
Rule 5: Save for six months of hardship, invest for a lifetime of prosperity. While savings matter, you only need to save so much. Instead of creating budgets to save as much as possible, create budgets to save some and invest the rest. Invest your leftover capital into long-term sustainable companies and stocks. This by itself is a savings account with minimal risk that leads to much better returns than an FDIC-insured account, especially if considering a long-term approach.
Rule 6: Define your long-term financial strategy early on. Don’t wait until you reach a certain amount to define the strategy you should follow in order to accumulate more wealth. You should set financial benchmarks early on and ensure progression and diversification occurs as you reach them. By setting financial goals yearly, you can get much closer to growing rather than having years gone by only surviving. Think of your goals in various ways outside of dollar amounts to reach. For example, I used to set various goals that were financial in nature but not dollar-driven. It would perhaps be being in less than an 8 percent tax bracket one year, but the next year it would be to have six properties for rent instead of two. It’s always about understanding the financial picture in your head before painting it.
Rule 7: Scale your financial growth. As I said earlier, diversification is key to ensuring slower but healthier returns while minimizing risks. Scaling is a strategy you can use early on to set forth diversification methods based on the financial picture you want to paint for yourself as mentioned in Rule 6. Scaling is your ability to add different types of investments to your portfolio based on the size of your wealth. Create a guideline as to how to scale matters. For me, it looked something like this.
  • Under $100,000 in cash assets – Goal was to lower tax bracket to 12 percent by leveraging write-offs.
  • Between $100,000 – $250,000 – Add real estate for rental income to portfolio.
  • Between $250,000 – $500,000 – Add high-risk stock portfolio
  • Over $500,000 – Look for investments overseas as well as invest in other businesses or ventures.
Keep in mind that these seven rules are not geared to help you reach fortunes overnight, but rather help you frame your 10-year path for sustainable wealth, as it will take discipline and hard work with a hint of tolerance for financial risk.
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I accomplished something pretty significant between late 2009 and early 2013. I grew my net worth from zero to $100,000. I don’t remember the exact day or month I crossed from negative to positive net worth territory, but it was sometime in late 2009.
I was 25 years old and worth exactly as much as I was as a baby. Over the next three and a half years, I’d build my net worth from zero to six figures. Here’s how to do what I did:

Solidify Your Income

After graduating college in 2007, I joined a small, internet marketing startup for below average pay. I didn’t sweat my starting salary because I saw opportunity (which is the only reason I agreed to work for them). Throughout my first four years with them, I doubled my salary.
To double your income, only work where there is opportunity to do so. Look for examples of others who have done so and listen for clues about opportunities to ramp up the value you provide. You’ll need a significant income (most likely over $50,000/year on average) to create a six figure net worth in just a few years so make sure you’ve got the opportunity to get to that level.

Track Every Dollar You Earn and Spend

Right around the time I crossed into positive net worth territory, I started tracking my finances with Mint.
I’m only going to say this once. Tracking your finances is an ABSOLUTE MUST if you don’t want to be broke your whole life. Here’s how to get started:
  1. Head over to and create an account.
  2. Connect all of your financial accounts (checking, savings, money market, credit cards, mortgages, car loans, brokerage, retirement, etc.)
  3. Manually add in the market value of any property you own with a significant worth (houses, cars, land, etc.)
  4. Log in 3-4 times per week for the next 3 months and categorize EVERY SINGLE transaction (rent/mortgage, food, transportation, insurance, entertainment, shopping, travel, etc.)
  5. At the end of 3 months, take a look at your trends, which will show you how much you earned and spent, and get ready to scream.
  6. Stop the bleeding and start actually building wealth.
Tracking your finances is the ONLY way you will build wealth. Take it from me. If you don’t know how much you’re earning and spending every month of every year, you won’t be getting anywhere financially let alone crossing the six figure mark anytime soon.

Get Control of Your Big Three Expense Categories

The big three expense categories where we spend the majority of our money at are:
  1. Housing
  2. Transportation
  3. Food
We need to get and keep spending in these three categories under control.
Housing: If your mortgage payment is “only” $700/month, but your heating and air conditioning bill is over $200 per month, you shouldn’t be bragging. Add up your mortgage/rent payment, your property taxes (if you own), your association fees (if you own a condo), your average monthly maintenance costs (if you own), AND all of your monthly utilities and THAT’S your housing cost total. For example: here are my monthly housing costs:
  • Rent: $745/month
  • Electricity: $40/month
  • Total: $785/month
Transportation: Again, we’re not just looking at your car payment, we’re looking at everything, including gas and maintenance. Looking at the past year, here are my average monthly transportation costs:
  • Gas: $111/month
  • Insurance: $83/month
  • Licensing: $13/month
  • Maintenance: $10/month
  • Washing/Detailing: $2/month
  • Total: $218/month
Food: Once again, when you look at your food expenses, look at all your eating, including fast food, fine dining and even coffee shops/alcoholic drinks. Here are my average monthly food costs for the past year:
  • Groceries: $165/month
  • Alcohol: $71/month (ouch)
  • Eating Out: $21/month (+ an est. $35/month for dates out with my girlfriend)
  • Coffee Shops: $1/month
  • Total: $293/month
As you can see, I keep my big three in control. Make sure you do as well if you want to get ahead.

Eliminate Every Other Unnecessary Expense

If you are serious about saving up a big pile of money, you need to cut costs in more areas than just your big three. When I started saving big time money, I made all kinds of little cuts in many areas. I made cuts on my:
  • Haircuts
  • Shampoo
  • Body Soap
  • Hand Soap
  • Toothpaste
  • Toothbrushes
  • Deodorant
  • Facial Tissues
Most of these things can be downgraded from name brand to generic without even noticing. I cut the equivalent of $20/month from my monthly spending on just the things above by doing just that. In addition, I cut cable TV and other recurring monthly expenses all together.

Stop Borrowing Money (Seriously, Never Do It Again)

When you borrow money, you pay interest. Also, when you borrow money, you buy what you don’t have the money for. Even worse, borrowing money for liabilities costs you money, because what you’re buying is costing you money.
When you buy a shiny new (or slightly used) car, you are buying something that is going down in value. In 2008, I bought a car for $20,000. Today, it’s worth less than $10,000. Even if I would have paid for it in cash, I would have lost the ten grand. But buying it on credit cost me even more, since I paid interest as well.
The main problem with borrowing money is that you’re buying something much more expensive than what you could afford to buy in cash, therefore, you have a bunch of additional risk. It compounds your purchase big time, either positively or negatively. Most of us think we’re going to make it rich from buying our home, but very few of us will come out making money on our homes.
All in all, borrowing money is NOT a winning strategy for building wealth, only for destroying it.

Solidify Your New Habits

After you make your lifestyle cuts and live that way for a few months, it will be on auto-pilot. My spending sits just over $22,000 per year pretty much automatically these days. I don’t force myself to save money, it just happens.
To build your net worth from zero to $100,000, you need to solidify your habits by maintaining them for a few months. After that, it will be automatic, like it is for me. I created freedom in my life by changing my habits and making them permanent.

Remember Your “Why”

Lastly, remember your “why”.  Remember why you want to build wealth in the first place. For me, it was about creating options, freedom and independence in my life. For you, it may be about something similar, but make sure to find what it is and remember it.
When you have big reasons for doing it that are close to your heart, that will motivate you to get there. You can do it, no matter where you are today.

An Opportunity to Explore These Concepts Deeper

If you’re interested in getting the full message of what these 7 steps did for me and my life, I created a video course, called “How to Grow Your Net Worth from $0 to $100,000 in 3.5 Years“, digging deeper into it.
Download my Free 'Cheat Sheet' below to get the EXACT same steps I used to dig my way out of debt and grow my net worth from $0 to $100,000 in just a few years (which allowed me to quit my job, focus on my business and take back control of my life).
Simpler than all this, spend one less dollar than you make per day.