How to Build Wealth on a Stagnant Salary? The Key to Financial Planning: Investing in Yourself Grows Wealth 3x Faster Than Saving
In this article, you'll learn:
The Value of Financial Planning Is Upgrading Yourself — Not Just Growing Money
In recent years, with the stock market surging, personal finance has become a hot topic. Many people believe that if they don’t learn about investing, they’ll be broke forever. So everyone starts studying how to manage their money to avoid a life of poverty. However, in all this focus on “finance,” the crucial element of “planning” is often missing. Most people have just one thought: “I can save a few thousand NT$ a month — how should I invest it?” Their goal is simply to “make more money.” But in reality, making more money is the result of financial management, not its purpose.
Financial Planning Helps You Realize Your Greatest Asset Is Yourself
For everyone, the most important asset isn’t the few thousand dollars you save each month — it’s your ability to earn. For example, if someone earns NT$30,000 per month, that’s NT$360,000 per year. Assuming they’re 25 now and can work until 60, that’s 35 years. Even without factoring in inflation or other variables, their total future earnings add up to NT$14.4 million. You might say that’s not even enough to buy a house, but here’s the point: if they can raise their salary to NT$50,000 or NT$60,000, that’s nearly a 2x increase, and their financial future would look completely different.
When you think growing your assets through investment returns is the key, the real key is actually increasing your earning power.
The Power of a Salary Increase
A monthly salary increase might seem small, but it’s far from insignificant. If your monthly income goes up by NT$5,000 — from NT$30,000 to NT$35,000 — and you maintain your NT$30,000 lifestyle, that extra NT$5,000, over 35 years, can build up to nearly NT$10 million in assets. The premise is that you increase your income rather than just cut expenses. Compared to jumping from NT$30,000 to NT$50,000, getting from NT$30,000 to NT$35,000 is much more achievable. Of course, if you can reach NT$50,000, that’s even better.
Let’s say a 25-year-old earns NT$30,000/month with NT$28,000 in fixed expenses. When income rises to different levels, we invest the extra money into an ETF with a 6% annualized return. Here’s how much they’d accumulate at ages 40, 50, and 60:
| Income Level | Age | Accumulated Amount |
|---|---|---|
| NT$35,000 | 40 | NT$2,407,157 |
| NT$35,000 | 50 | NT$5,339,796 |
| NT$35,000 | 60 | NT$10,807,435 |
| Income Level | Age | Accumulated Amount |
|---|---|---|
| NT$40,000 | 40 | NT$4,127,839 |
| NT$40,000 | 50 | NT$9,168,294 |
| NT$40,000 | 60 | NT$18,554,466 |
| Income Level | Age | Accumulated Amount |
|---|---|---|
| NT$50,000 | 40 | NT$7,567,735 |
| NT$50,000 | 50 | NT$16,806,365 |
| NT$50,000 | 60 | NT$34,024,996 |
Whether your income is NT$35,000, NT$40,000, or NT$50,000, you could potentially accumulate tens of millions in assets. So the key isn’t the rate of return — it’s the principal. And where does the principal come from? It’s created by your own capabilities.
How to Start Investing in Yourself and Boosting Your Income
Investing in yourself is one of the most important and rewarding processes. It can enhance your skills, knowledge, and quality of life. Here are some effective ways to get started:
Education & Learning
Reading books: Choose books related to your interests and career, and keep learning. Online courses: Online courses, in-person classes, and workshops are great ways to level up. Platforms like Coursera, Udemy, and edX offer plenty of quality options. Getting certified: Consider earning professional certifications to boost your expertise and competitiveness.
Health & Fitness
Diet: Maintain healthy eating habits and choose nutrient-rich foods. Exercise: Work out regularly to stay healthy — gym, running, yoga, or anything else you enjoy. Mental health: Learn stress management techniques like meditation, mindfulness, and deep breathing to maintain psychological well-being.
Financial Management
Budgeting: Understand your income and expenses, then create and follow a budget. Saving & Investing: Open a savings account, make regular deposits, and consider investing in stocks, funds, or other instruments. Financial literacy: Read personal finance books and articles to learn effective money management.
Building Your Network
Professional events: Attend conferences, seminars, and networking events in your industry to meet experts and peers. Social media: Use platforms like LinkedIn to build and maintain professional connections. Finding a mentor: Seek out an experienced mentor to guide your career development.
Developing Hobbies
Explore new interests: Try different activities and classes to discover new passions. Keep learning: Turn hobbies into skills — learn an instrument, painting, or writing.
Self-Reflection & Goal Setting
Set goals: Define short-term and long-term goals, and create plans to achieve them. Reflect regularly: Periodically review your progress and growth, and adjust your plan as needed.
Through these methods, you can level up holistically and build a solid foundation for future success. Remember, investing in yourself is a continuous process that requires ongoing effort and persistence. Everything listed above is also what I’ve been putting into practice in my own life over the past few years.
Boosting Returns Isn’t as Powerful as Increasing Your Principal
Strategies for raising income shouldn’t focus solely on investment returns. You should emphasize your personal earning power, because in a normal market with 5%–8% returns, building real wealth requires sufficient principal. Think about it: if you want NT$50,000/month in passive income, you’d need NT$10 million at a 5% return — and it has to be a guaranteed gain! How realistic is that? Or maybe you only have NT$3–5 million, and you’d need a 17% or 10% return to get NT$50,000/month — and that’s only in a scenario where you never lose money.
Tip
If your salary grows from NT$30,000 to NT$35,000, that’s the same as a 16% return — and you might get there just by switching jobs.
The Importance of Financial Planning
Every workplace comes with its challenges, and quitting doesn’t necessarily solve everything. I saw a job-seeking post that said something like: “The pay doesn’t have to be great, but there has to be very little work, close to home, and all nice coworkers.” If your goal is low pay but you want to live a rich life — isn’t that just a dream? Of course, exceptions exist — some people might have that kind of setup — but it’s probably not where you are right now.
Time Is the Most Precious and Scarce Resource
Financial management shouldn’t focus solely on financial assets — it should also value human capital. The returns generated by human capital are everyone’s greatest asset, especially for young people — and their most valuable asset is time. When someone asks me, “Do you really have to wake up this early?” My answer is “Yes.” Because aside from family time, I also need time for work. So my personal time has to come from areas I can control. Fortunately, I’m someone who has no problem waking up early and stays up late with good reason. Since realizing this, I’ve been too lazy to waste time on meaningless things.
Further Reading
Lazy Da’s Conclusion
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