Tomorrow logo mark


Arrow left icon Investing 101

The Millennial’s Guide to Building Wealth

By Team Tomorrow
Published August 15, 2019

Many of the so-called millennial generation know very well that their dollar doesn’t seem to go as far as it did for previous generations. In fact, there have been several clapbacks recently by millennials in response to some claiming that millennials have their priorities out of order—as if they prefer to buy avocado toast rather than a home.

The truth is that higher education is more expensive for millennials than it was for baby boomers, and housing costs in areas with hot job markets are also much higher. Many millennials entered the workforce on the heels of the Great Recession, taking jobs with inadequate salaries while shouldering significant school debt. These and other factors make it more difficult for Millennials to achieve what some consider important financial milestones, like buying homes and cars.

Many millennials are also living with their parents longer, getting married later, and having children later. So if you are a millennial, your priorities may be somewhat different than they were for baby boomers—and your strategies for building wealth should reflect the new economy you live in.

Building Wealth

Building wealth is simple in theory—save more than you spend. Though there are many different ways of doing this, building wealth can be approached from three principle angles: reducing expendituresincreasing income, and investing your savings.

Here are some ways to achieve all three:

Reducing Expenditures

Reducing expenditures is a sure way to making your income go further and free up money to put into savings, retirement accounts or investments. If you take a hard look at your expenditures, you can surely find things to cut or reduce. If your budget is so tight that there is nothing you can cut, feel free to move on to ideas for increasing your income.

Alternative career paths

College tuition has increased exponentially over time, much faster than inflation or the cost of consumer goods. Many people finish college or graduate degrees only to face crushing student loan debt and an uncertain job market or a job that just allows them to scrape by.

If you put in the time and effort, you should be able to find various sources of funding, like scholarships, grants, fellowships, teaching assistantships, etc. Also consider attending a less expensive college, living at home during college if that is an option and anything else you can do to reduce or eliminate what you take out in student loans.

You could also consider skipping college in favor of starting a business, going to a technical school, or going straight into the job market, if you already have a good sense of what you want to do and if those jobs generally do not require a college education. Considering the high job loss estimates associated with automation going forward, an alternative path may be the best path.


If you live in a large city, your biggest expense is likely housing. If that is the case, try to find ways to reduce what you are paying. If you are living in a bigger city, owning a home may not be a possibility for a number of years. If you do own a home, consider making part or all of your home available on Airbnb or to subsidize your mortgage. Or if possible, buy a multi-family unit and rent out the portion you are not occupying.

If you are renting, find roommates or opt for a smaller space in order to reduce the amount you are paying. Renting makes more sense in some markets, even if you are able to afford a home. If renting and buying are both options, make an informed decision about which option would make the most financial sense.

Housing should ideally be 30% or less of your income. If it is more than that, consider looking for jobs in a city where the cost of living is cheaper but the salary is comparable to what you are earning.

Cut expensive drinking habits

If you really want to cut expenses, consider cutting your consumption of expensive drinks—alcohol and coffee. Especially in major cities, a night out can easily reach $100 or more.

If you drink a $15 bottle of wine a week, for example, cutting your alcohol consumption could theoretically save you eight hundred dollars or more per year.

If you have a Starbucks habit, consider making your own coffee at home or only going occasionally. Some studies estimate that the average American spends more than $1000 per year on coffee.

If that money is put towards savings or an investment instead, you will have a nice nest egg a few decades down the road.

Put a cap on other consumer habits

These days, the KonMari method and other minimalism movements are gaining a lot of adherents. Reducing the number of possessions you have is a great start, but the greatest advantage that minimalism holds for your finances is curbing consumer spending.

Whichever philosophy you choose, whether it’s only buying and keeping things that are useful or “spark joy” or setting a strict budget, you should notice a huge difference in the cash that is freed up to invest or save.

You can start by:

  • Getting rid of things you don’t use or need (either donate or sell)
  • Stop buying things you do not need
  • Pare your wardrobe down to items you love and wear all of the time, and donate/sell the rest
  • Cut out impulse buying—plan ahead what you are going to buy
  • Buy fewer things overall

Media consumption

If you want to be radical, you could cut your paid media consumption entirely, and rely on your local library for internet, books, and movies.

However, cutting internet service may not be a feasible option for a lot of people, especially if you work from home. You can also reduce your media consumption bill by:

  • Opting out of cable and satellite services
  • Signing up for the most basic internet service plan
  • Sharing a Netflix or Spotify subscription with your family
  • Buying a streaming media stick like Roku, Chromecast, or Amazon Fire
  • Getting a bare bones phone plan and using the internet only at home

Buy used

Certain things should perhaps be bought new—buying a 10-year-old used mattress, for example, is not highly recommended, but for many other things, you can buy good quality second-hand products.

For example:

  • Cars (always buy used, depreciation on a new car is insane)
  • Books
  • Housewares, like dishes, pots and pans
  • Furniture
  • Electronics
  • Toys
  • Clothes
  • Tools

In the past, the best bet for buying used household items was at a consignment store or a yard sale, but now you can find a huge variety of good quality items online. Check out,,, and Facebook buyers/sellers groups for your city or region.

Ditch your car

If you live in a city, it may make more sense for you to just use public transportation, biking, ride sharing, and taxi/Uber/Lyft to get around as needed, rather than being burdened with a monthly car payment.

If you need a car, buy a used car that is a reliable model with a clean Carfax history. If you buy, do what you can to minimize the car payment, and choose something that gets good gas mileage or is energy efficient. Don’t buy out of your budget.

Increasing income

Increasing your income is an obvious way to grow wealth—it enables you to pay down debt faster (if you have any) and save more. If you have money to save, you have money to invest. Just be careful to continue to control your expenses as your income goes up or you won’t reap the benefits of a higher income.

Negotiating a raise or a better starting salary

If you are currently working, your employer may have a system in place for regular raises and bonuses. Many do not, so take the initiative to approach your boss at regular intervals about promotions and pay increases. That conversation may make you uncomfortable, but it is worth the payoff! If you have a one-time salary increase of $5,000 and invest it properly, it can be worth almost $1.4 million dollars after 30 years of compounding interest!

A great way (in fact, often the best way) to increase your salary is by switching jobs. If you have a job offer on the table, put some reasonable effort into negotiating the starting salary and bonus (if there is one).

Passive income

Another important element of increasing your income is trying to establish some passive income revenue streams. Passive income is income that you earn regularly without putting a lot of work into earning or maintaining it. Most passive income revenue streams require upfront work to establish, but little or possibly no work to maintain.

There are a number of ways to do this, for example:

  • Write an ebook and sell it online
  • Sell other digital products (on your website, or through marketplaces like Etsy)
  • Sell photos online
  • Start a blog and monetize through ads and/or affiliate revenue
  • Create an online course and sell it on Udemy
  • Make YouTube tutorials
  • Investing (see more info below)

If you have a single source of income, you have a high-risk single point of failure. If you can distribute your income across multiple channels, you’re far less susceptible to job loss.

Side jobs

If you have free time to spare, why watch TV? Make more money instead! There are many side jobs that will allow you to choose your hours. Whatever extra you make can go into savings or towards paying down debt. Your options for side jobs will vary based on your skills and training, but choose something that doesn’t take away time or energy from your full-time job.

Some jobs you can do on the side include:

  • Drive for Uber or Lyft
  • Contract creative work
  • Creating a blog
  • Part-time or seasonal retail or food service jobs
  • Tutor (in person or online)
  • Secret shopper
  • Pet walking or Pet sitting
  • Babysitting
  • Housecleaning
  • Window cleaning
  • Repair or maintenance work
  • Sell on Etsy
  • Retail arbitrage
  • Freelance writing, editing, graphic design, etc.
  • Tax preparation
  • Teach art or music

Investing Your Savings

If you are able to increase your income and decrease expenses—even just enough to save an extra $50-100 per month, invest it early and often. Make sacrifices early on to put money aside in savings or investment accounts—something that will accumulate and accrue interest or growth over time. The earlier you start, the larger return you will have as you near retirement age, and the more secure your finances will be.

Here are some worthy uses of your savings:

  • Contribute the maximum possible to your 401(k) and other retirement accounts. If your employer matches your contribution up to a certain percentage, take full advantage of it—it’s free money. Just make sure the 401(k) is a low-fee account, as 401(k) and mutual fund fees can consume an enormous portion of your potential returns.
  • Consider using Wealthfrontor Betterment“roboadvisors” to manage investments. They charge a percentage of your investment, but the fees are much, much lower than a traditional financial adviser.
  • Do you own research and invest on your own. You make money on the stock market by buying low and selling high (preferably by value investing and holding investments over an extended time), and if you have time to devote to it, you can follow the market and choose your own investments.
  • Consider cryptocurrencies. There are good reasons for investing in cryptocurrencies like Bitcoin or Ethereum, but do your research. Although cryptocurrencies have been around since 2009 and have great earning potential, they are still in their infancy and are a highly volatile investment class.
  • Invest in real estate or a business. Business and real estate investments could potentially yield huge returns, but be aware of the risks. Investing in an individual home or business tends to be more at the mercy of market forces than more stable investments.

Even if you choose to approach your wealth-building from one angle, like reducing expenses, and putting what you save in an account that accrues interest, you will build wealth over a 30-year period.

If you are able to reduce your expenses, increase your income and invest, forget 30 years—you will be able to retire early and live comfortably at a much younger age. Whatever you do, remember this wisdom from John Lennon:

“When I was 5 years old, my mother always told me that happiness was the key to life. When I went to school, they asked me what I wanted to be when I grew up. I wrote down ‘happy’. They told me I didn’t understand the assignment, and I told them they didn’t understand life.”

Don’t have Life Insurance? Well we made it easy for you to apply for reliable life insurance through our simplified and streamlined online application process. No exam | No waiting | No hassles | Fast, free quote!


More from Investing 101

Home Buying 101: How to Save Money for a House

Read more 3 min

How to Buy a Home With Bonds and Stocks Earnings

Read more 4 min

6 Types of Home Loans You Need To Know About

Read more 4 min

Renting or Buying a House: Which is Better?

Read more 5 min

Arrow left icon Investing 101