Most people want to become wealthy someday. But if you are like me, you don’t want to wait until you are old and grey to enjoy your wealth.
So that poses the question – can you become wealthy (even a millionaire) in 5 years or less? Or is that just a fantasy? Here’s my take:
You can become a millionaire in 5 years, but the only realistic path to achieving this milestone in so short a time is by starting a business. It can be a traditional brick and mortar business or an online business, but the key is to start one that has a realistic chance to succeed and grow within that period of time.
Now you may point to crypto-millionaires and other people who have invested in high risk investments as examples of folks who have done this without starting a business. But that is not a realistic path because your chances of repeating their success are slim. In many cases, they invested in the right thing at the right time – which means your window of opportunity to do the same has probably passed.
I have also read articles that claim you can become rich in 5 years by spending less than you earn, saving the difference, investing in stocks and other assets, and generally observing good personal finance habits. I operate a personal finance blog, so I fully support developing good financial habits, but you won’t get rich in 5 years by relying on these types of conventional strategies.
That’s because your earning potential is capped if you follow this advice. How much you can save and invest is determined by your income, which is determined by your job. And in most cases, your job can only bring in so much.
For example, let’s say you earn $50k per year (which is around the median income in the U.S.)and save 20% (or $10k) of that each year, you will only have 50k at the end of 5 years. It’s decent money, but you are far from being rich.
If you do really well and invest that money at 15%, you will still only have a little over $67,000. Hardly setting the world on fire. And not even close to that $1 million mark.
But a business has no such cap. If you strike on the right idea and execute it well, the sky’s the limit on how much your business can make.
So, now that we know that a business is the right vehicle to obtain wealth in a relatively short period of time, the question becomes what businesses should you start?
I have put together a list of 7 businesses that have the potential to generate significant income for you in less than 5 years. For each of them, I have provided data showing how much these businesses can make and in many cases, how quickly they can make it. I have also provided links to resources showing you how you can get started in each of them.
Let’s get into it!
Note: If you prefer a condensed version of this article in video format, check out my YouTube video below.
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The information contained in this post is for informational purposes only. It is not a recommendation to buy or invest, and it is not financial, investment, legal, or tax advice. You should seek the advice of a qualified professional before making any investment or other decisions relating to the topics covered by this article.
Let me begin with my favorite business to start if you want to be rich in 5 years (or less): blogging.
I imagine you all know what a blog is (it’s basically a website filled with articles), so I won’t belabor the point. This website, for example, is a blog.
What I love about blogging is that you can basically start for free (so there is no real financial risk if you fail). On top of that, the ongoing costs and maintenance responsibilities are almost zero and you can do it at home in your spare time (unlike a brick and mortar business where you have to buy equipment, manage the storefront, pay for rent, deal with inventory, etc.).
On the flip side, the money you can make from blogging within a pretty short period of time can be incredible. I am talking about thousands or even tens of thousands of dollars each month (proof of this to follow).
I want to be clear that I am not talking about mega blogs like Nerdwallet and Huffington Post. Those sites make millions per month. I am talking about sites that have been started by regular people like you and me. For example, even this little site makes thousands per month.
Don’t believe that even a small mom and pop blog can make this type of money? Check out empireflippers.com. They are a platform that buys and sells websites. When you browse through their offerings you will see blogs that started just a few years ago making tens of thousands of dollars per month. Seriously, just browse around and see for yourself.
Note: Empire Flippers is pretty rigorous about the businesses they list on their site and perform significant due diligence on the numbers. They require clear proof of traffic and earnings before you can even list on their website.
Here’s a representative sampling of blogs that I found on their site on the day I wrote this article. All are under 5 years old and make over $10,000 per month:
- Blog in the social media niche that started in March 2020 making average monthly net profit of over $190,000 per month!
- Blog in the travel niche that started in April 2017 making average monthly net profit of over $33,000 per month.
- Blog in the sports niche that started in June 2017 making average monthly net profit of over $18,000 per month.
- Blog in the apparel and accessories niche that started in May 2018 making average monthly net profit of over $18,000 per month.
- Blog in the technology niche that started in September 2019 making average monthly net profit of over $10,000 per month.
Of course, these specific blogs may no longer be available by the time you are reading this. But these types of businesses (with high earnings and fairly recent start dates) are there all the time. I have no doubt that there will always be relatively new businesses that are making tens of thousands of dollars per month on that site at any given time.
Now, to be fair, not every blog is going to generate this type of money (or do it so quickly). Many fail to generate any money at all. But what do you really have to lose? As I mentioned before, you can get started for very little money and it costs almost nothing to maintain your site. If you are willing to invest the time and effort, why not take a shot? (I am sure glad I did!)
So let’s say you take the plunge (and turn out to be really good at it).
If you are able to grow a blog into something that generates around $20k to 25k per month, your blog is going to be worth $1 million because your blog is generally worth between 40x and 50x of its monthly income these days. Voila – you are now a millionaire. As you can see from some of the examples above, this is completely doable within a 5 year period (although it will be challenging).
But even if you fall short and your blog only makes $1,000 per month, that yields a valuation between 40k-50k! That’s almost as good as saving 10k each year for 5 years (and a lot less painful).
If you are interested in learning more about blogging and how to get started, check out my article on How to Start a Blog From Scratch.
I cover all of the key areas you need to know, including how to set up your website and most importantly, my best tips for writing great articles, getting traffic to your blog, and monetizing that traffic.
If you don’t have the time or inclination to do this on your own, you can hire a service to create a website for you. Niche Website Builders is a UK based firm that specializes in this.
I have used their content writing service to help me expand my blogs when I was running short on time, but they do offer a full service model, where they will create your website for you from start to finish and include content that has gone through their rigorous keyword research process.
Check them out here if you want to learn more.
Start an Amazon FBA Business
Did you know that you can start an online business and sell your products on Amazon? Want to sell iphone cases? High end cameras? Watches? You can sell almost anything through the Amazon FBA program (FBA stands for Fulfillment By Amazon).
Under this program, you provide the inventory and Amazon takes care of fulfillment (which means that they will store your products in their warehouses, pick, pack and ship them to your customers, and provide customer service for your products).
As a beginner, the key is to find the right niche product to sell. You will need to find suppliers who can reliably make the product for a good price, organize deliveries (which are often coming from China) to the Amazon warehouse, wisely manage inventory, get great reviews, and fight off competition.
It won’t be easy, but if you can do it, you can make a ton of money and make it fast. This is evidenced by some of the listings that you see for Amazon FBA businesses on empire flippers. Here are some examples:
- Amazon FBA business in the supplements niche started in February 2019 making average monthly net profit of over $34,000.
- Amazon FBA business in the home niche started in April 2020 making average monthly net profit of over $24,000.
- Amazon FBA business in the lifestyle niche started in July 2020 making average monthly net profit of over $20,000.
- Amazon FBA business in the baking niche started in March 2019 making average monthly net profit of over $12,000.
If you want to learn more about how to get started doing Amazon FBA, check out the official Amazon FBA page introducing you to the program.
If the thought of making money with Amazon is intriguing to you, check out my article on how to make passive income with Amazon [9 strategies that work]. It covers Amazon FBA as well as other ways to make passive income through Amazon. These strategies include affiliate marketing through Amazon Associates, selling designs through Merch by Amazon, and much more.
Start a YouTube Channel
If you prefer video over the written word, you can start a YouTube channel and start making serious money fast. Again, nothing is guaranteed in life (or business) and plenty of YouTube channels do not make any money at all (in fact, you generally need 1,000 subscribers and 4,000 watch time hours to even get accepted for monetization options). Source
That means you need to make more than just a few videos and they have to be compelling enough to get people to subscribe to your channel. No easy task, especially in the competitive YouTube landscape. But it certainly can be done.
The nice thing about YouTube is that, unlike blogging, you can generally get traction sooner. When starting a new blog, Google puts you into a “sandbox” (although some dispute the existence of this). This means that your site is basically going to get very little traffic for the first 6-8 months.
But you can start getting traffic to your YouTube channel much quicker, which means you can start making money much faster. Of course, it’s generally tougher to make a quality video than to write a simple blog post, but the payoff can be worth it.
Start Publishing eBooks
You can also start an Amazon KDP business (“KDP” stands for Kindle Direct Publishing). Through this program, you can publish your own books and sell them on Amazon. If you have always dreamed of being a published writer, this can make that dream a reality.
And the money can be good too…
Check out these Amazon KDP businesses that I found on empire flippers to see what I am talking about:
- Amazon KDP business started in March 2018 making average net monthly profit of over $33,000.
- Amazon KDP business started in September 2016 making average net monthly profit of over $11,000.
- Amazon KDP business started in October 2016 making average net monthly profit of over $9,800.
If you want a complete guide to making money with eBooks, check out my article: Making Money [Passively] Writing eBooks: A Simple 5-Step Guide.
Start a Vending Machine Route Business
Another great business that can generate significant wealth for you in a relatively short period of time is a vending machine business.
For just a small investment of a few thousand dollars you can start building a vending machine route that can generate hundreds of thousands of dollar per year. I was first introduced to this business a few years back when I was looking to purchase a business that could generate passive income (because I was still working a full time job).
I ran across a vending machine business run by this couple who built it into an enterprise that generated nearly $200,000 per year. They had dozens of machines in their route and one of their main contracts was with the local school board, so they had vending machines in all of the schools in that district. They were able to build this business over the course of just a few years.
Pretty compelling business model.
If you want to learn more about how to start a passive vending machine business, check out my article on the topic here.
Start an ATM Route Business
ATMs are also a great way to generate very high returns on investment within a short period of time. Like vending machines, you can buy a new ATM for just a few thousand dollars and start generating passive income.
And the returns can be spectacular.
You can be looking at ROIs in excess of 100% per year if you find a good location for your ATM. This type of ROI is supported by information from companies in the ATM industry. According to Liebermann Companies, you may be able to make your money back on an ATM within 6 months of buying, which equals a 200% ROI.
If you want to learn more about how to start a passive ATM business, check out my detailed article on the topic here.
Real Estate Investing
Another great way to achieve meaningful wealth in five years is to invest in real estate. Although most people view real estate as a “slow and steady” way to accumulate wealth, there are unconventional strategies you can use to fast track your road to wealth.
The BRRRR Strategy
One of the most popular strategies is the “BRRRR” strategy, which stands for Buy, Rehab, Rent, Refinance, Repeat. The idea is this – let’s say you find a beat up property for $100,000, but after fixing it up, it is worth $200,000. You “buy” it for $100,000 (but only put down 20% or $20,000), you “rehab” it for $20,000, you “rent” it out for $1,500 for monthly cash flow, and then you “refinance” it (which means you replace the existing $80,000 loan with a cash out refinance of $140,000 assuming you get a 70% loan to value on the cash out refinance).
That means you will get $60,000 out when you refinance. You can use that money to “repeat” the process, but this time with two or three properties instead of one. You can imagine how quickly you can grow your wealth by doing this.
Sandwich Lease Options
Another real estate strategy to quickly grow wealth is by using sandwich lease options.
A sandwich lease option is an arrangement where you buy a lease option from the owner of a property and then sell a lease option to a tenant. A lease option is just a contract where (i) you purchase the right to buy the property at a certain price and (ii) you enter into a long-term lease for the property (including the right to sublease it out to another tenant).
You are the middleman in the transaction and can make money by negotiating a lease option with the owner that has a lower rent and a lower purchase price than the lease option that you have with your tenant.
Here’s an example of how a sandwich lease option works.
Under your lease option with an owner, you pay a $3,000 option fee to buy the property for $100,000 within three years. Your rent is $1,000.
You then structure a lease option with your tenant-buyer where they pay you $4,000 as an option fee. Under your lease option with them, they can buy the property for $120,000 and they pay you $1,200 per month in rent.
You pocket the difference between the two contracts.
Obviously, you capture the spread between your option fee and the tenant’s option fee. You also pocket the difference between the rents. So in our example, you get $1,000 for the difference between the option fees and $200 per month for the difference in rents.
If you land the trifecta, your tenant will buy the property from you by using their option, and you will then get to pocket the difference there too (which would equal $20,000).
I know it’s a bit complicated and a lot to take in. If you want a more detailed explanation of sandwich lease options, including the risks and benefits of using this strategy, check out my article on the topic here.
So there you have it – 7 strategies (backed by data) that you can use to get rich in five years.
If you want to learn about more great businesses that you can use to rapidly generate wealth (including those that generate high cash flows or have very high success rates), check out my articles below.