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Outsourcing work and creating passive income are key to getting rich.
- The two best ways to make money are by outsourcing your work and creating passive income, according to self-made millionaire Grant Sabatier, who runs the blog Millennial Money.
- Outsourcing allows you to add value to your business and focus on growing your career.
- Passive income from sources like real-estate investments and blogging can help you maintain financial independence, Sabatier said.
There are plenty of ways to make money and build wealth, but some require less effort than others.
According to Grant Sabatier, who retired early at age 30 with $1.25 million, the best ways to build wealth don't call for monitoring the stock market or working overtime.
"The two best ways to make the most money over the long term are to hire other people to do the work for you and focus on building passive income streams," Sabatier wrote in his book, "Financial Freedom: A Proven Path to All the Money You Will Ever Need."
Passive income "is why most of the world's richest people are entrepreneurs who started and grew their own companies. Instead of working for money on their own, they have others working for them. Why mow lawns when you can hire someone else to do it and still make a majority of the money?" Sabatier wrote.
As he explains it, employees add value to a business, making it more valuable than a single individual could. "Building a business multiplies and compounds your power to make money by the number of employees you have," he wrote. "Many people have gotten rich by simply paying other people to do the work and connecting demand with supply."
These employees don't have to be full-time either - it can be anyone you pay to do the work, Sabatier said.
Outsourcing is a good move even if you don't have your own business. To retire as a millionaire, Alicia Butera, CFP at Planning Within Reach, recommends outsourcing things that stand in the way of your earning, from hiring a financial planner to manage your finances to an accountant to do your taxes to someone to mow the lawn or grocery shop.
"In your mid-career, you're probably making the top tier of your income, so start having people do things for you so you can focus on your career and extending your income and benefits," Butera previously told Business Insider.
There are a variety of ways to yield passive income
Outsourcing can also help yield passive income - it's even better if your business generates consistent reliable passive income to offset or cover your monthly expenses, Sabatier said. "Once you have reliable monthly passive income that you can live on, you've effectively reached financial independence, " he wrote.
Building online courses for people to buy or creating a drop-ship company, in which you create a product and outsource the creation and shipping - for example, using Amazon to sell your product - are both ways to create passive income, Sabatier wrote.
You can also establish passive income through blogging. JP Livingston, who retired early at age 28 with a nest egg of more than $2 million, earned more than $60,000 in one year from her blog. With the use of affiliate commissions and online advertisements, a good portion of these earnings were passive income - she spent less than five hours a week blogging.
But passive income can also be earned through investments like stock dividends, Sabatier said. "I've found stock, bond, and real-estate investing to be the most manageable and dependable investments," he wrote.
The latter is a favored investment source among millionaires, according to self-made millionaire John of ESI Money, who spent a few years interviewing millionaires. Many seasoned investors build wealth through real estate.
"Investing income is the ultimate passive income, and this is the main strategy the wealthy use to both get rich and stay rich," Sabatier said.