Right now, someone is trying to come up with a plan to escape their corporate job to realize their dream of entrepreneurship. But this can be tricky if you don’t come from wealth. This article will explain how to grow your W-2 income.
Here is a common scenario: You have a great business idea. You have already identified potential customers. You are now ready to get your business off the ground, but you’re stuck in a corporate job, and the financial resources needed to start the business are limited. So where is the money going to come from?
Funding a business can take a bit longer when you don’t come from wealth. So in this case, the entrepreneur needs to figure out a way to grow their W-2 income. There are a few ways this can be accomplished.
The first is through real estate investments. Even with below-average credit, you can own a home. As a home investor, you can borrow against the equity in the home. The money can then be used to fund your business. You can also sell the home and use the profits to start or grow a business. Another real estate strategy is to rent out your property. But with only one home, it will take considerably longer to generate enough income to fund a business. So the other two options are preferred.
A second way to grow W-2 income is to launch a starter business that you can operate alongside your corporate job. So, to get to where you really want to go, you may have to start a business that has a low barrier to entry. So maybe something that can be done online or something you can do from home. Maybe it’s some sort of physical labor business you can do on weekends. You can then use the profits to start the business you really want. Ideally, you might even be able to sell the starter business and use the proceeds to launch the dream business.
The third way to grow your W-2 income is through the stock market. Statistically, this is a good way to reliably multiply W-2 income over time; and it’s correlative with financial strength. Those who participate in the stock market tend to do better financially than those who don’t. By the way, if you have a 401K, congratulations, you are participating in the stock market. Over time, the stock market moves in an upward trajectory, which is why the performance of just about any 401K is "good" and maybe even "exceptional" for some.
Another reason to participate in the stock market is because as your business grows, there will be opportunities to take on bigger loans, which might be needed for a number of reasons: business expansion, equipment, or even buying out a competitor.
Earlier, I said that stock market participation was correlative with financial strength. It is also associated with financial intelligence. As your business grows, there's a good chance you will develop banking relationships. A banker can easily gauge someone's financial intelligence by the language used in their conversations. For example, if you’re exploring a larger loan, as part of your overall financial snapshot, a banker may ask if you have any financial investments beyond what they can see in your account. It helps if you already have stock-related investments that you can both explain and point to because it’s important to understand that from the lender's perspective, it’s easier for them to say, “yes” to loan requests when they can quickly determine that you understand how things work. Or in simpler terms, if they loan money, what are the odds of it being paid back? So understanding advanced stock market concepts [backed by evidence] will probably benefit you in the long run.
We covered three strategies for how to grow income from a W-2. The key is to focus on making strategic investments into either of the three pillars of wealth: real estate, business ownership, and stock market investing. If you found this information helpful, please share it with a friend.
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