5 Wealth-Building Strategies Graham Stephan Swears By
For those of you who don’t know Graham Stephan, he’s a 34-year-old real estate investor who’s been making waves on the internet. Stephan became a millionaire at the age of 26, and shares his wealth strategies with his followers on YouTube and TikTok.
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Stephan gives investment advice and comments on financial news and trends while still remaining remarkably transparent about his own failures during his career. Recently, Stephan released a video talking about why his coffee company, Bankroll Coffee, failed, urging his viewers to learn from his mistakes.
Of course, you don’t get to be a millionaire in your 20s without some financial aptitude. Here are some of Stephan’s most valuable wealth-building strategies.
Build Your Credit Score
Since your credit score influences just how much wealth you can amass by way of property, Stephan recommended working to make it the best it can be.
If you don’t have credit, Stephan suggested looking into secured credit cards. These typically require putting down a deposit, and then as long as you pay off the balance on time, you’ll start to build your credit.
There are also debit cards that build your credit, according to Stephan. Then, he said to monitor your credit. After six months of building credit, you could open up another credit card that you’re eligible for. “The more on-time payments you have, the higher your score is going to be,” Stephan said in a YouTube video.
He advised that after a year, you could probably get a credit card with more cash-back perks and continue to build your credit by paying it off on time. After about 18 months, according to Stephan, you should have a score between 700 and 750, which “will generally get you the lowest interest rates anytime you apply for financing,” he said.
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Pick a Career That’s Not Dependent on How Many Hours You Work
“Anytime you work a career that pays you hourly, most of the time, you will plateau rather quickly,” Stephan said in another video. Instead, Stephan recommended working a job that pays based on results. “Your income has the potential to skyrocket because now hours no longer make a difference,” he said.
Careers in sales are great places to find jobs that pay based on results delivered, according to Stephan. In the same video, he said that employees who stay in their jobs longer than two years get paid, on average, 50% less, so it might be worth it to switch jobs or careers and leverage your skills to get a higher-paying job.
Invest Immediately
“The more time you allow for your money to grow, the more money you will have,” Stephan said in the same video. It doesn’t really make a difference how much you start investing, but just keeping the habit of investing what you can will significantly grow your money over time, according to Stephan.
He recommended opening a Roth IRA for your retirement and to start investing in it as soon as possible. “If you invest 10% of your income starting at the age of 20 years old, it’ll take you about 51 years of doing that to accumulate enough money for your investments to replace your income. If you bump that up to 30%, it’ll take you 28 years, and if you manage to save 50% of your income, you could literally retire in 17 years,” he said.
Diversify Your Income Streams
Also in the second video, Stephan said that 65% of millionaires have three or more streams of income. These streams can include the earned income from your full-time job, earned income from a side hustle, dividends paid from stock investments, interest paid to you from a high-yield savings account, money from real estate rentals and capital gains.
Capital gains are the profits you make off selling investments for higher than what you bought them for. Though you do have to pay taxes on this money, Stephan said that tax is typically much lower than the tax you’re paying on the income from your full-time job.
Avoid Lifestyle Inflation
When you do start to generate a little more income, Stephan said to be careful not to completely change your lifestyle, otherwise known as lifestyle inflation. “I’ve seen so many situations where people are making $150,000 a year and not able to save any extra money than they were when they were making $40,000 a year despite them making four times more money,” Stephan said in the first video.
Stephan recommended avoiding this. When you do have extra money come in, invest it as soon as you can. “Throughout my entire 20s, I lived by the motto that I would invest my money to pay for the things that I wanted, and then I would save up for the specific investments, not the thing itself,” he said.
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