I had life all figured out when I was a kid. My plan was pretty straightforward: I was going to become a billionaire and famous after I graduated college. Then, I was going to give back to Africa.
A layup, right?
Well, so I thought.
You see, when you’re a kid, everything seems possible. You dream about discovering your abilities to control others with your superhuman brain, and you spend hours staring at a coin trying to make it float in the air. Everyone around you says you can accomplish everything you put your mind to, and you believe them.
As adults, we’ve got used to the idea that we don’t have any telekinetic abilities, but we still dream about becoming rich. I mean, look at me! I’m all grown up, and my plan of becoming a billionaire is as high as ever.
Of course, my chances of winning the lottery are pretty slim, so I’ve broken down this goal into small actionable steps. Phase one: make $100,000 a year in my 20s.
I have made over $100,000 a year the last three years. My career projection went something like this. My first full-time job after graduate school, I made $85,000. My second job, I made $98,000. The next year I made $130,000. Last year I made $165,000. If we are to include my side hustle income, then I made over $200,000. Three months into 2017, and I’ve already made $245,000 this year alone. After making over six-figures the last three years, and still only 28 years old, it’s safe to say I have accomplished the first phase of my goal. As a result, I want to teach you how you can get there too.
But, keep in mind: the journey to making $100,000 a year is not easy. You need a strong work ethic and a lot of perseverance. Probably 99% of the people reading this don’t have what it takes to make it to the finish line. Or maybe they will, who knows? It’s all up to you in the end.
Now, grab a tasty beverage, get comfortable in your chair, and let’s see how you can make $100,000 a year in your 20s.
Step 1 – Find a Job, Any Job
You need to start somewhere. So, if you just graduated from college, then a good idea would be to get a regular full-time job. I know, many people end up hating it and dream about never having to work again (I know I have!) But, having a regular job comes with a lot of perks:
- A Paycheck: No matter what you’re doing, you need money. Whether it’s for your basic needs, such as food and utilities, or for your more personal needs, such as vacations or nights out, you need money to survive in this world. Another advantage that comes with a regular paycheck is that it allows you to save money for bigger plans (starting a business, buying a house, starting a family, etc. )
- A Sense of Identity: What is one of the first things people ask you when they meet you for the first time? They usually want to know what you do for a living. Like it or not, your job shapes you as an individual. By having a job, you learn not only new and different skills, but you also learn about the most important values and principles you need to apply in your day to day life.
- Learning New Skills: I’ve already anticipated that, haven’t I? I bet you did too. One of the main benefits of having a job is that it helps you grow and acquire new skills. Sure, you get hired based on your skills, but as you evolve and learn new things, you develop your competencies. That never hurts. You never know when you might use them outside the office, as well.
- Meeting New People: I’ll be the first to agree: networking is hard. The idea of being in a room full of strangers making small talk is what nightmares are made of. However, networking is a major part of advancing your career. You need to meet new people and build relationships that could help you chase your dreams. You can meet a lot of interesting people through your full-time job who can guide you on your path to success.
- Meaning & Purpose: No job in the world is without sense. On the contrary, it’s a valuable experience that might shape your life vision and goals. More than that, no matter what you do, you’re helping people because the services you provide are needed, whether we’re talking about selling food or building software.
What If You Don’t Have a Job or You Are Still in School?
How many of you have a skill set, an asset or are diligent workers?
Predictably, nearly every one of you will raise an imaginary hand.
So why not monetize your skill set by renting it out to others.
That’s what the pioneers of collaborative consumption thought. In today’s economy, ownership of cars, homes, skills, etc. can be out of reach for some people. So, why not share your goods with others?
Why am I telling you all this? That’s because you can take advantage of the sharing economy to make money. Here’s how.
Freelance on Upwork
You don’t have to be a college graduate to be good at something. I’m sure you have a lot of skills that you can use to get freelance jobs. Maybe you have a natural writing talent, or you have extraordinary organizational skills. Whatever the case, Upwork is a great opportunity for people looking to earn some money. Here’s what you need to get started:
- Sign up and select a membership plan;
- Create your profile: If you want to make your profile useful and attractive to employers, you need to complete it thoroughly. Go beyond filling out just the required text fields, such as your name, rate per hour, and skills. Write a short bio, include samples of previous work, add links to your social media profiles and blog. The bottom line is that you need to fill in everything, no matter how insignificant it seems. Make sure that the information you provide is accurate.
- Set up your payment option: It would be a good idea to establish at least two different payment methods so that you can access your funds easily no matter what.
- Use Upwork Messages: That way, you can organize and manage discussions with your clients, as well as share deliverables.
Drive with Uber or Lyft
Here’s another way to make money if you currently don’t have a job. One of the perks of being an Uber or Lyft driver is the flexibility that this job provides. You can set your schedule depending on how much money you need. If you want more, you drive more. If you need less, you drive less. It’s up to you.
Here’s what you need to become a Uber driver:
- You must be 21 years of age or older
- You must have three years of driving experience
- You need to have in-state car insurance in your name
- You need a clean driving record
Here’s what you need to become a Lyft driver:
- You must be 21 years of age or older
- You need to undergo both a driving record check and a criminal background check
- You need a valid insurance with your name on the policy
- You need valid plates with current registration
The great part about being an Uber or Lyft driver is that almost anyone can do it. And, it’s a smart way of earning extra money. After all, if you have a car and some time to spare, why not use it to increase your bottom line? I have a lot of friends who work as Uber drivers during the weekends to save money for a nice vacation or new furniture. And I also know people who became Uber drivers after they lost their jobs. It was a way for them to stay in the game while trying to find another job.
Pickup Food for People
I have a coffee maker that makes coffee for me. A dishwasher cleans the dishes so that I don’t have to. And, an automated content curation tool curates and shares the best content for me. Anything that allows me to save time is a plus. And, I know there are many others like me.
Step 2 – Find the Divisions in Your Current Company That Pay the Most
Once you get a full-time job, now the fun can start. You may enter a company in a junior position, but as your skills and experience improve, you should aim higher. It is well known that some divisions pay better than others. So, keep your eyes out for job openings in your company and let your manager know you are interested in them. Switching to a more profitable division is one of the easiest ways to increase your salary.
If you don’t know how to find or apply to jobs in upward trending divisions, keep these tips in mind:
Check Your Company’s Annual 10-K Report
The 10-k report is an annual document required by the U.S. Securities and Exchange Commission that offers an exhaustive summary of a company’s financial performance.
It’s different than the annual report shared with stakeholders in that it presents an in-depth analysis of the company’s economic activity during a particular fiscal year. It also includes a full recap of market performance, risks, corporate agreements, and so on. Although this is public information, some of the information in this report is not advertised or promoted to internal employees unless they are curious enough to go looking for it.
This document will help you understand where your company is headed, which divisions are trending upward and which ones will get de-emphasized or even laid off. Although this applies to public companies, some private companies with more than 500 stock option holders may also have to publicly file this report. Also, some private companies have to file other financial related forms with the SEC, that can be vital to you finding out the true direction of your company.
How Do You Find the Annual 10-K Report?
If you want to find your company’s annual 10-K report, you need to use one of the following methods:
- Search for it on Google by typing “your company’s name” + 10-K report
- Search the U.S. Securities and Exchange Commission’s website here.
Switch Jobs Every Two Years
After you’ve determined the most profitable divisions in your company, it’s time to switch roles (or even careers.) Gone are the days when changing jobs every couple of years was considered a problematic behavior. Unlike our parents, most of whom probably worked in the same field for the duration of their career, millennials are far more likely to switch jobs – if not careers – in their lifetime.
And, that’s a good thing. Recent studies have shown that workers who stay with a company longer than two years get paid 50% less.
So, you have all the reasons to keep moving forward. Remember: getting too comfortable with your job is dangerous. During my career progression, I joined IBM after only two months with Deloitte Consulting. I received a $7,000 bump in salary. I have been with IBM for almost four years, and have held four different roles during that time. In each new role, I earned more money. Two of the role changes were due to organizational changes, one was me graduating from IBM’s Summit Program (training) and only one was initiated by me. I requested to transfer from technical sales (sales engineer) to a full sales role (account executive), due to the higher commission checks they could receive. It was a gamble that has paid off, high-risk high-reward.
Step 3 – While You Have a Job, Search for Another Job
Let’s say that you are no longer satisfied with your current job. You may be thinking the next obvious step is to quit and start looking for a new one.
Not so fast!
Searching for a job while still having one gives you the luxury of having enough time to think about what you want to do next. On the contrary, if you quit your current job before getting another, you might become desperate. You won’t afford to be picky, and employers can sense that.
So, keep your leverage. Don’t go looking for a job while thirsty!
Apply for Jobs Every 1-3 Months
Contrary to what you may think, constantly changing your job won’t put a black mark on your resume. In fact, the math is a bit different. Those who stay in the same position for longer that two years are stuck with stagnant wages while those who jump from job to job regularly boost their salaries.
More quits equal increased earnings.
Think about it this way: if every time you change your job, you get a 10% salary increase, then you should be well on your way to earning $100,000 before you reach your 30s.
Make a List of Your Top 25 Dream Companies
- Research and list the top five paying industries you like
- Then, research and list the five top-paying companies in each of these industries
- Going further, search for jobs on sites such as Glassdoor.com. Not only that you’ll have access to all the open positions on the web, but you can also find articles about the companies hiring the most in your industry. That way, you can always be up to date.
- Research Government reported salaries for H1B visa holders. The H1B visa program is the dominant method that employers use to hire international professionals and students to work in the USA. By law, companies must report actual salaries of H1B visa holders they employ. This makes for a great database to find real world salaries for jobs. However, factor in that American citizens and permanent residents have higher salaries than H1B visa holders, due to having more leverage when negotiating with companies.
Using this method, you should now have a list of 25 companies. Well, don’t get too excited, you still have work to do. If you want to increase your chances of finding a new job, you need to do more than just sending your resume.
Get Informational Interviews Using LinkedIn
The next mandatory step is to leverage LinkedIn. Send out 25 connection requests to 25 people at each company you would like to work for. Yes, this means you will be sending out 625 total connection requests across the 25 dream companies on your list. Making money is a numbers game, the faster you learn that, the fast you’ll make lots of money. These people must be in the six figure role you would like to work in, or senior managers of people who work in that role. Reach out to them via LinkedIn messages requesting an informational interview. DO NOT tell them you want to work at the company! Simply state that you are looking at several companies in the space, may apply for a job down the line, and would like to ask them a few questions about working at said company.
I got my job at Deloitte using LinkedIn, and it was a referral that came from me simply asking for an informational interview. If you can master LinkedIn alone, you will make six figures before reaching 30 years of age, guaranteed!
In my current six-figure sales job, I make my living on LinkedIn every day. I get meetings with VPs and Directors of Fortune 500 companies from simple cold emails and following up if I don’t hear back from them. I will do a separate post on how to make money using LinkedIn, but for now just note, that do not give up on a message until you don’t hear back from the person three times.
Step 4 – Decrease Your Taxable Income by Starting a Business on the Side
Money seems to grow on trees for a very select number of people. As a result, the gap between the rich and everybody else is getting bigger by the day.
You probably know the famous interview in which Warren Buffett explains how he pays fewer taxes than his secretary.
It sounds outrageous, but he’s right, though.
Millionaire Mike, who makes $5,000,000 a year will pay only 18% on his income tax while Average Joe, who makes $50,000 a year, will pay a tax rate of 20%.
How is it possible that millionaires pay less in taxes than their secretaries or janitors? It’s because the tax laws in the United States are designed to benefit investors.
That said, if you plan on getting rich, a regular job won’t suffice. But starting a business on the side might get you there.
Start Your Side Business
It’s said that the most important trait of a successful entrepreneur is his or her ability to see an opportunity and imagine something where others haven’t. But, I’ve seen many stuck at the starting line preoccupied with every single detail.
But, here’s the thing.
Your business idea doesn’t have to be fancy or complicated. Just think about the coffee cup sleeve – there’s nothing ingenious about a piece of carton that protects the drinker’s hands from hot coffee. But, it solved a problem most people were having.
If you still have trouble finding a good business idea, focus on what you know already. For instance, if you are a salesman, you could start a consulting business and teach others how to master the art of selling.
At this stage in life, with you so young, the main purpose of your business is to decrease your taxable income. Making a profit is nice, but not the end of the world. Amazon didn’t make a profit for nearly six years. The main point of your business at this stage is to help you pay lower taxes, and take that extra money to re-invest into your business.
Learn How to Convert Personal Expenses to Business Expenses
As difficult as it may seem, having your own business will bring you some benefits. For instance, you can convert some of your personal expenses to business expenses, such as:
- Home office
- Mileage or car
You can write off these expenses by linking them to your business. You don’t have to be a master accountant to do it. It’s quite simple.
Here’s an example.
A good friend of mine runs a nongovernmental organization. He’s a master when it comes to writing off expenses. Almost everything he does is somehow linked to his business. For instance, if he plans a vacation to the Philippines, he’ll turn it into a business trip. Sure, he would explore the islands, surf, and relax but, at the same time, he would also schedule meetings with possible partners and investors, or simply look for business opportunities while exploring the country.
So, the secret is to add a business spin to what you’re doing, just as my friend does. Not only will you have fun, but you will have fun for free and expand your business, at the same time. There’s no law that says your one employee corporation can’t hold board meetings in Honolulu, Hawaii or Tokyo, Japan.
Step 5 – Automate Your Expense Logging
If you’re going to be using your business to lower your taxes, you’ll have to keep expenses.
Keeping track of your expenses may prove difficult, especially when you have a lot on your mind. Luckily, nowadays almost anything can be automated. For instance, I have an app that reminds me to pay my bills, one to remind me of meetings, and one that reminds me when my favorite shows are on.
So, it’s only normal that there’s an app that can help track your expenses. In fact, there are hundreds of different options out there, but I prefer to do the bulk of my expense tracking using Expensify. This app will automatically track and log expenses for you, by linking up to your debit and credit cards.
Here’s how to use it:
- Sign up for a free plan using your email, this will help you do everything you need.
- The next step is to import all your credit and debit. From now on, any transactions on them will be automatically logged and categorized.
- When it comes to filing your taxes, just pull up your expenses by categories. This will make filing your business expenses incredibly easy. If you need any additional information, you can simply search and filter through all your transactions each tax year with their search box.
If you still need convincing, here are a few reasons you should use Expensify, as a business owner.
Step 6 – Decrease Your Largest Expenses
Remember what I said about trying to spend as little as possible? Well, decreasing your most significant expenses is part of it.
Lower Your Rent
Move to a city with a lower cost of living. Sure, it’s cool to say that you live in New York City, but when you pay an arm and a leg for a shoebox, maybe it’s time to reconsider your decision.
If your business or job requires you to travel a lot, why not make some money while you’re not home? You could, for instance, rent your house on Airbnb. If you want to learn how to earn an extra profit or even create a real business renting your home on Airbnb, then you should check my guide here.
Decrease Your Car Payment
If you have a car that you barely drive, then you should rent it out on sites like Turo. Turo is a peer-to-peer car rental service that allows regular people to rent their cars to each other. It’s completely up to you on how you price your car. You can either set your rate or allow the service to adjust them based on supply and demand.
But, what if someone messes up my car, you may ask.
Well, that’s the beauty of the service. Turo has a one million dollar liability insurance policy that covers drivers while they are renting your vehicle.
Step 7 – Invest in Yourself First and Take Risks on New Business Ventures
Risk-taking is almost synonymous with being successful. You need guts and the right mindset to make a dramatic career change or start a business. The prospect of earning a six-figure income is worth it. But, before you dive headfirst, you should make sure that you invest in yourself first.
Automate Your Savings
You’ll need extra money if you want to invest both in yourself and in new business ventures. That’s why you should maximize your employer’s 401K match.
To make sure that you’re not leaving any money on the table, you need to contribute the right amount of money at the right time. Let’s see how you can do that in a few steps:
- Understand Your 401K Matching Program: While some companies have very compelling matching programs, others offer small or no matching programs at all. Analyze the overview of your 401(k) program to make sure it fits your needs;
- Never Turn Down Free Money: In other words, don’t fail to contribute to your 401(k) plan because if you do, then you are losing money your employer would otherwise be providing for your retirement.
- Calculate Your Contribution Amount: This calculator might help. Remember, you can’t maximize your benefits if you don’t pay attention to the real numbers;
Multiply Your Sources of Income
A lot of people think that the rich are getting richer because they have more investments than everybody else. But, that’s not necessarily true. They don’t have a secret formula that they use every day to grow their investments. Instead, they are smart about them.
So, once you have the basics of investing covered, focus on the following:
Invest Part of Your Income in Your Side Business
Your side business is a real business. If you treat it as a hobby, not spending time and resources to grow it, then how do you expect to make money?
Invest Part of Your Income in Passive Income Streams and Investments with Lots of Upside
Your side business might be your baby, but the number one rule any disciplined investor must know is: never put all of your eggs in one basket. So, take some of your income each month and invest it in things with lots of upsides. That means you should keep your eyes on the market, research it, and jump at volatile opportunities you encounter, as they usually mean lots of possible money could be made.
They say the average millionaire has around seven different sources of income besides their main job. Maybe the number is a bit of an exaggeration, but the main takeaway is still valid: you need to diversify your revenue stream if you want to make $100,000 in your 20s.
Here are some ideas that can help you generate passive income.
- Sell on Amazon: I’ve already written an entire guide about how to make money selling on Amazon, so I encourage you to read it.
- Growth Stocks: The reason growth stocks work so well is that corporate earnings evolve as the economy evolves. Not only that they are easy to buy and sell, but growth stocks can also help you stay ahead of inflation. Practically, if you need cash right now and you have stocks, you can sell them at any time.
- Crypto-currencies: There’s no secret that crypto-currencies like Bitcoin and Ethereum (Ether) are on the rise. In fact, I’ve recently read an article about a man who invested $27 in Bitcoin and made a profit of $886,000 in four years. While it’s true that he forgot about the investment, it still shows you the power crypto-currencies and other speculative investments.
So, now that you have a few ideas on how to multiply your sources of income, it’s up to you to decide which one fits you best. The important thing is that you expand your income streams.
Step 8 – Use Your Side Business to Brand Yourself as an Expert in Your Industry
As your business grows, your experience in your field improves as well. Learn how to use that to your advantage.
Year One – Network Every Month
Attend at least one event a month in your industry. Not only will you improve your knowledge and skills, but you will extend your network. Here are a few examples of events you could attend and how you should use them:
- Trade shows
As I said, these events are an excellent opportunity for you to talk to people and extend your network. But, here’s something I noticed. About 95% of people fail to make meaningful connections because they don’t follow up. So, if you had a great conversation with someone at a networking event, send them a note and remark on your interaction. Mention how you enjoyed talking with them. If you’ve offered to connect them with someone else, then you should follow through with your promise. Networking isn’t over the minute you walk out of the event. It’s a continuous process.
At the end of the first year, you will have improved your knowledge and skills. You will possess not only the vocabulary but also the ins and outs of how your industry operates. Most importantly, you will have new, meaningful connections with experts in your industry.
A wise man once said, “Your network, is your net worth.”
Don’t take it lightly.
Year Two – Start a Blog
Start writing content on trending topics in your industry – it’s a great way to make yourself known.
- Write on your blog or even write guest posts on other sites in your industry. If you don’t have a blog or if you don’t have enough name recognition to land guest writing opportunities, then you can publish your content on LinkedIn Pulse.
- Be consistent. If you want to be seen as an industry expert, make sure to post content regularly. Set a day each week or month when you publish new content and stick to the schedule. Make sure your articles are unique, helpful, and add value to your audience. As a rule of thumb, make sure your posts are at least 1,000 words or longer. Ideally, they should be around 3,500 to 5,000. These should be evergreen pieces that last the test of time. How to guides are a perfect example.
Year Three – Publish a Book
Publish a book and start presenting it at events in your industry. Believe me, it’s not as difficult as it sounds. You can take your first 12 blog posts and re-purpose them as a print book, eBook, and audiobook.
Wait a minute. Aren’t print books dead, you might ask yourself.
Far from it, and there’s another advantage to physical books. Even if you don’t sell any, they will become your new business card.
A print book will separate you from most people in your field. Just imagine going into a job interview and handing an employer a physical copy of your book. Or imagine what people will think when you’re talking about your side business, and they come to find out you wrote a book in the space it works in. There’s no question that you will make a lasting impression.
Step 9 – Leverage Your Options
By this point, you should have several different options on how to continue your career.
Continuing to work corporate jobs, keep interviewing every 1-3 months and leverage your side business and book to keep getting higher paying jobs.
If your side business is taking off and bringing in more money than your regular job, you can make the leap and do it full time.
Improve your brand even more by reaching out to top influencers in your field, requesting to interview them for your business’s website or upcoming book. Stay in touch with these people and try to meet them in person as often as you can.
There’s a reason successful people surround themselves with like-minded people. Even if you are not the one running the show, their mindset, attitude and lifestyle can influence your opinions and, eventually, your actions;
Take Steve Jobs, as an example. Maybe he wouldn’t have become one of the greatest businessmen in the world without the help of Mike Markkula. While it’s true that he invested in Apple, which brought him a one-third share in the company, the most significant contribution he made in Steve Jobs’ life was his role as ‘adult supervisor.’ Mike Markkula was the one who kept Steve Jobs on track.
After talking to all these amazing people and eventually finding a mentor, gather all the interviews with the top people in your field into a second book.
See how it all adds up?
The more people you meet and the more books you publish, the more name recognition you get. Just look at Tim Ferriss, the famous author, who knew how to leverage his brand and platform to interview billionaires and create a new book called “Tools of Titans.” Then, he used his network and people he interviewed to promote it.
That’s what you need to do too in whatever line of work you work in.
If you’ve made it this far, then one thing should be clear by now: making $100,000 a year in your 20s isn’t easy. It requires a lot of work and perseverance, and not everyone is cut for it. However, this guide can be an excellent blueprint on how to achieve this goal.
Let’s sum it up:
First, you need to get a job that brings a constant stream of revenue. Use LinkedIn, to prospect at your top 25 dream companies, to land informational interviews. Once you land a job, don’t get too comfortable. Constantly look for new opportunities to grow whether within the company or outside of it. Make a habit of applying to new jobs every one to three months – it’s one of the easiest ways to increase your salary and know what the market is willing to pay for your skills.
In the meantime, you can start a side business. Don’t forget to automate your expense logging so that you can save both time and money.
Learn how to use your side business to decrease your expenses and start looking for high-risk, high-reward investment opportunities once you have automated your savings.
Naturally, the next step that follows is branding you as an expert in your industry by using your side business.
I know, the process is long and tedious. It will take a lot of effort, time, and patience. So, it’s important not to lose sight of your goals as you move forward.
Be careful, though. You need to be ready to adapt and change when the circumstances require you do to so.
So, get started on the journey now!
Let me know how it goes. Hopefully, by the time you’re in your 30s, we can start scheming about how to make a million.
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