15 ways to become rich without investing in real estate

Real estate has been praised to be an effective path to building wealth and becoming rich. While this sector has made a lot of millionaires, you don’t have to buy real estate to be rich. There are many investment options you can start as early as today to become rich without investing in real estate.

If you don’t like real estate or don’t have the time to deal with tenants, tackle repair projects, and take midnight calls because one of your properties is having issues, putting your money in alternative investments will be a smart choice. Some of these strategies are more profitable than real estate investing.

If you are ready to make money with less stress, here are different ways to become rich without investing in real estate.

Table of Contents show

1. Put your money in 401(k) plans and IRAs

Making contributions to 401(k) plans and individual retirement accounts (IRAs) is one of the best and fastest ways to become rich without investing in real estate. Putting your money in tax-advantaged accounts allows you to build wealth faster without doing all the heavy lifting or day-to-day management as you would do with real estate investments.

Here are reasons why investing in retirement savings is a great way to build wealth without investing in real estate.

You don’t pay taxes on your earnings until you are withdrawing the money. Some retirement savings accounts such as Roth IRA and Roth 401(k) plans allow you to grow your account tax-free and pay no income tax on your withdrawals. You might pay a small tax on your Roth 401(k) if you received an employer match.

The power of compound interest allows your money to grow exponentially over a long time

Direct and indirect tax benefits. Investing in 401(k) and IRAs can help you become rich without investing in real estate due to direct or indirect tax benefits. For example, 401(k) contributions are tax-deductible which lowers your taxable income.

Possibility of employer match. Some 401(k) plans come with employer match which is free money to your account. Most employers match your contributions up to a certain percentage such as 6% of your gross income.

You might be able to give the account to your heirs tax-free. If you have a Roth IRA, you will pass the account to your descendant tax-free.

Direct diversification. 401(k) and IRAs enable you to spread your investments across a variety of asset classes by buying investments that are already diversified such as index funds, mutual funds, etc. Diversification makes your money safer which is a great step in becoming rich.

How much can you contribute to 401(k) in 2024

In 2024, the contribution limits to 401(k) plans are $23,000 with an extra $7,500 catch-up contribution if you are 50 or older. For 2023, you can contribute up to $22,500 to a 401(k) plan or $30,000 if you are 50 or older.

How much can you contribute to an IRA in 2024

In 2024, the contribution limits to an IRA are $7,000 with an extra $1,000 catch-up contribution if you are 50 or older. For 2023, you can contribute up to $6,500 to an IRA or $7,500 if you are 50 or older.

2. Learn a new skill

Becoming rich is more about how much you know and what you do with your knowledge than your actual salary. While making a higher income is an easier way to become rich without investing in real estate, learning new skills can help you reach financial freedom much faster.

A new skill is what gives you an edge over your competitors. The skills allow you to use resources at your disposal to make more money with less effort. For example, if you are currently making $50,000/year as a tech support, learning an extra programming language or getting an IT certification can help you double your salary or triple it. The extra money you will be making can be used to pay down your debts faster, create an emergency fund, or invest more money in your future.

3. Pay off your debt fast

One of the most underrated ways to build wealth without buying a house is to pay off your debt. While you can use debt through real estate to build wealth with rental and commercial properties, paying off your debt helps you become rich even faster.

When you are carrying too much debt, you lose the freedom to use your income. Someone else such as a bank or credit card company puts a lie on your income. These limitations keep you stuck financially for a while as every penny you make is used to pay off debt.

Always remember that when you make a debt payment, you become poorer while the bank gets rich. That is how it works. The interest and fees you pay to the bank are what keep you poor when you are carrying too much debt.

To build wealth and become rich without investing in real estate, get out of debt as fast as possible. Paying off your debt faster frees a lot of your capital which you can utilize to invest in income-generating assets such as dividend stocks, bonds, and stock-based funds.

4. Increase your income

The foundation of all wealth building is your income. Your income is what keeps you going while you are working on your projects, side hustle, or simply structuring your business. The income takes care of your bills and pays for your food while you are figuring out ways to boost your wealth.

Making more money also serves as an effective strategy to become rich without buying real estate. The more money you make, the faster you build wealth. For example, if you are currently making $40,000/year, it is more likely that you are struggling financially.

What if you can increase your income to $80,000/year? With this extra income, you can take care of your bills, create an emergency fund, pay more toward your debts, and have extra cash to invest. Increasing your income, helps you do and achieve more which is an essential strategy when it comes to building wealth.

How to increase your income?

To increase your income and become rich without investing in real estate, start by negotiating a higher salary at your current job. If you cannot get paid more money, find a job that compensates for your effort, knowledge, and skills.

You can also start a side hustle to make extra cash or pick up a freelance gig. Freelance websites like Fiverr, Upwork, and Freelancer.com are great places to find freelance jobs. For example, if you like reading books, you can get paid to read books. If you like pets, you can get paid to walk dogs or pick up pet-sitting jobs.

Another great way to increase your income and become rich without buying a house is to flip items online or sell your crafts on websites like Etsy. You can also declutter your home, flip electronics online, or sell used products online to increase your income.

Another way to increase your income to help you build wealth without buying a house is to deposit your funds in high-yield deposit accounts. High-yield savings accounts and CDs can easily earn you 5% APY or more. What makes these deposits great is that they are FDIC insured up to $250,000 per deposit and per account category. You can also invest in dividend-paying stocks and get paid dividends quarterly.

5. Start a business

If you are business-minded and want to be rich without buying real estate, you might need to get started with your business idea. With access to the internet worldwide, you can start a business today such as an online business store, and market it to millions of people through social media on the same day.

To succeed with your business, develop a unique business idea that serves your intended customers. Additionally, make sure your product or service provides a solution to a problem or satisfies a certain need of your target market to ensure its profitability.

6. Invest in stocks

If you want to become rich without investing in real estate, you might need to start looking into the stock market. The stock market is not just about purchasing individual stocks. There are many ways to invest in the stock market and build wealth without buying real estate. You can either buy individual stocks for stock growth and dividends or buy stock funds.

Stock funds are usually grouped into three categories which include Mutual Funds, Index Funds, and Exchange Traded Funds(ETFs). Buying individual stocks carries more risks as they are directly affected by market volatility.

Stock funds on the other hand are less volatile and therefore, less risky. When you buy a stock fund such as an Index fund, you are buying all the stocks in the fund which makes it an already diversified investment. Meaning if one stock goes to zero, your portfolio will be affected that much.

7. Create a blog or YouTube channel

Another great way to build wealth without buying a house is to create a popular blog or a YouTube channel. These two options allow you to reach a lot of audiences worldwide. Once you have enough followers on your channel or good traffic to your blog, you can start monetizing them. There are different ways to make money with a blog or a YouTube channel which include affiliate marketing, display ads, sponsored content, selling your products, etc.

8. Invest in Mutual Funds

There are many ways to become rich without investing in real estate. Depending on the wealth-building strategies you choose to use, you could either reach success faster or slower. If you don’t want to take on too many risks, investing in Mutual Funds will be a safer way to become rich without buying a house or other real estate-related assets.

Mutual Funds are companies that pull money from different investors and invest in different securities such as bonds, short-term debt, and stocks. Mutual Funds are professionally managed, diversified, and affordable which makes them a great way to become rich without investing in real estate or individual stocks.

There are typically 5 types of Mutual Funds to choose from which include balanced Mutual Funds, Bond Mutual Funds, Stock Mutual Funds, Target Date Funds, and Money Market Mutual Funds.

9. Write a bestselling book

Do you want to become rich faster? If so, writing a bestselling book can be a faster route to financial success. While there is no guarantee of being a best seller, it does not mean you cannot give it a try. If you like writing and are original in your writing style and ideas, it is possible to write a bestselling book.

What makes being a writer a great way to build wealth fast is that once the book has found traction, you get millions of copies sold worldwide. The downside of writing books is that it takes a long time to write a successful book and can take many years to have it published. Most people choose to self-publish which is a less profitable and challenging way to write and publish a book.

10. Invent a product

Are you creative and find yourself trying to fix things everywhere you go? Or maybe you are always coming up with new ideas to solve problems. If that is the case, you are a true inventor! Being an inventor means creating products that solve certain problems.

Most financially successful people are inventors or highly paid individuals who work for inventors. Of course, business owners are also successful. But, many business owners were once inventors. Inventing new products might sound like rocket science but it does not have to be. For example, if you like to cook, you can invent a new product that helps you cut onions better, faster, and safer.

You can sell this tool to millions of other cooks around the world and make a ton of money. All it takes is an imagination and turning that imagination into a reality. If running a business is not your cup of tea, sell your inventions to other companies and earn loyalty.

11. Develop an app

If you have programming skills and a great imagination, building an app can be a lucrative way to become rich fast without the hustle of real estate. The app you build can be as simple as a basic video game app to a more complex app that solves day-to-day problems. You can also build a mobile app that offers different services such as cash transfers and internet security.

Building wealth usually comes from creating one product and selling it to a lot of people. This is why mobile apps are a great way to become rich as the app can be downloaded millions of times. Once the app is up and running, you can sell it to app stores.

12. Offer freelance services

Freelancing is another great strategy many people use to become rich without investing in real estate. Freelancing is when you provide a service to an individual or business usually online using the knowledge you have already. For example, if you are an accountant, you can pick up bookkeeping freelance gigs or offer consulting services to businesses. You usually get paid per project and you can work with many companies at the same time.

If you have a skill that is in high demand, start offering your services as a freelancer. Freelance comes with a lot of flexibility and you can work whenever and wherever you want.

13. Invest in cryptocurrencies

Although the crypto market is volatile, it has the potential for significant returns if you can do your research and invest wisely. Just like the stock market, there are a lot of cryptocurrencies you can choose from which range from more established and stable coins to more risky and unstable coind. Think of this as choosing between blue-chip stocks which are stable and established to penny stocks which are more volatile and risky.

Some of the most stable coins to invest in include Bitcoin(BTC), Ethereum (ETH), Tether (USDT), and Binance Coin(BNB). If you want to be more hands-on, start your crypto mining side hustle. Due to the high volatility involved with the crypto market, you should always maintain a small position in crypto and put your funds elsewhere to keep your portfolio diversified.

You might also like: 5 different types of portfolios: Which portfolio is right for you?

14. Peer-to-Peer Lending

Building wealth and becoming super rich sometimes involves becoming a lender yourself. That is right. You can easily do what banks do by offering short-term loans to different people. This is done through online Peer-to-peer lending websites.

To start making money and become rich through Peer-to-Peer lending, you need to create an account on one of the top Peer-to-Peer lending websites. Typically, you read through multiple projects from different borrowers and decide which one to lend money to. The borrowers then make regular payments just like a normal loan which gives you a regular interest payment.

Most borrowers you will encounter through Peer-to-Peer lending involve individual borrowers and small businesses. Usually, P2P lending borrowers are those who cannot qualify for conventional loans or those who need smaller balances of a few thousand dollars. Lending money online can be risky, but it can also generate a good return. Always do your due diligence before extending loans to online borrowers.

15. Start a dropshipping business

You have probably heard of dropshipping and how many people became rich through dropshipping. Whether you think it is possible to become rich doing dropshipping or not, the reality is that this is a viable way to make money and thousands of people have done it and made a lot of money.

Dropshipping involves selling products directly to the customer without holding any inventory. You simply partner with a supplier who will ship the products directly to the customer. If you want to become rich without investing in real estate, consider a dropshipping business. Amazon has a great dropshipping program to start with and you can outsource different products from different suppliers anywhere in the world. Alibaba is a great place to find cheap and profitable products you can sell.