How to Become Rich on a Middle Class Salary


Many people will lead you to believe that the only way to become rich is by inheriting a large sum of money, winning a lottery getting lucky in the Euromillions or starting a tech start-up and selling it for millions. Whilst those ways do make your rich very quickly, the chances of you getting rich that way is very slim.

On the other hand, if you have good savings and investing habits, the chances of you ending up rich dramatically increase. The road will be longer but that the the trade off for the certainty you receive in following that approach. With this approach, a person earning the average UK salary of £30,000 can end up a millionaire.

In this article, I will show you how having a good savings rate will have profound impacts on your future level of wealth. Whilst investing that money is important, the rate of savings is paramount.

In the following scenarios we assume an investing return of 7% per annum for simplicities stake. This is the historical average return that a plain vanilla index fund like a FTSE 1000 and S&P500 will produce. (You can either invest in an index fund directly through Vanguard or through an online broker or through a dedicated index investing platform such as Nutmeg.



Here is how much you need to save and invest in order to be rich. Many people have many different definitions of being rich and thus the savings rate you chose will determine how rich you want to be.

  • Savings rate 5% – £1,500 saved annually on a £30,000 income. Investing this amount annually from the time you are 30 till you are 65 will leave you with about £207,355.
  • Savings Rate 10% – £3,000 saved annually on a £30,000 income.Investing this amount annually from the time you are 30 till you are 65 will leave you with about £414,710.
  • Savings Rate 15% – £4,500 saved annually on a £30,000 income .Investing this amount annually from the time you are 30 till you are 65 will leave you with about £622,065.
  • Savings Rate 20% – £6,000 saved annually on a £30,000 income. Investing this amount annually from the time you are 30 till you are 65 will leave you with about £829,421.
  • Savings Rate 25% – £7,500 saved annually on a £30,000 income. Investing this amount annually from the time you are 30 till you are 65 will leave you with about £1,036,776.
  • Savings Rate 30% – £9,000 saved annually on a £30,000 income. Investing this amount annually from the time you are 30 till you are 65 will leave you with about £1,244,131.





As you can see, the higher your savings rate the more chances you get to become very wealthy. I know what you are thinking, a 30% savings rate is neigh on impossible. But they are little tricks you can do to help bump up that savings rate. For example, put money into your workplace pension if you have one so that if your company has a match on contributions, you get free money to your matched amount and this automatically gives you additional free savings. The other advantage of putting money into a pension is that money is put in there before you pay income tax so you are getting to keep an additional 20% of your money if you are a basic rate payer. Small wins like this really add up over time. You can find out more tips on how to save money in this section of the website.

On a personal note, I have a savings rate of close to 50%. My goal is to be financially free and have the choice of being able to retire in 13 years. You can follow me on my journey depicting the steps I am taking and the investments I am making that will help my dream come true.

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