Wealth creation is possible, but requires discipline and moving out of your comfort zone. Most people can benefit from creating a game plan to achieve financial independence through savings and investment. With a $70,000 income, you can achieve financial freedom and retire early. Here are things to do with your money once your salary hits $70K in order to generate wealth and retire early without relying solely on Social Security.

1. Budget Your Salary

Budgeting helps you know exactly where your money goes once you are paid each month. With a $70K salary, the temptation for impulse purchases or living a luxurious lifestyle will likely be very real. You can, unfortunately, easily get into debt without proper budgeting, leading you to a difficult paycheck to paycheck situation.

There are several budgeting plans with various levels of complexity. However, the 50/30/20 rule is a simple technique to help you manage your $70K income. The rule allocates your income into three categories based on after-tax income. Based on the rule, 50% of your income accounts for mandatory expenses like rent, mortgage, healthcare, food and utility, and childcare payments.

Savings and debt payment account for 30% of your income, meaning these earnings should go toward saving for an emergency, increasing your retirement funds, or paying off credit card debt or school loans. Wants to account for 20% of your income. Overall, this category includes non-essential expenses such as dining out or going on a shopping spree for new clothes.

2. Start Saving Early

Saving is the first step to wealth creation, although it is the most challenging for many people. According to a report by Vanguard, Americans save up to $141,542 for retirement. That’s an insufficient amount in an economy where pensions are declining, and Social Security benefits seem likely to reduce in the future.

It may sound like a cliche, but discipline is a critical component in increasing your savings rate. Try not to consider saving as a chore. It becomes easier if you set quantifiable objectives, track your monthly spending, and keep track of your success. This is where your budget can help you save so much money.

3. Pay off Your Debt

The average American has $96,371 in debt, including mortgages, credit card balances, and student loans. Debt can reduce your chances of early retirement and even affect your savings plan. There are various strategies to pay off your debt, such as starting by paying off the lowest debt you incurred to the highest, which is the snowball method. The benefit of this method is that it reduces the number of debts you have faster and gives you the motivation to pay off all your debts.

4. Invest for Growth

The only way to increase your income is to invest it in various assets that offer high returns. The following are ways you can invest your money once you hit a $70k salary.

Stocks

The stock market is where companies raise funds by selling shares of stock, or equity, to investors. Shareholders have a residual claim on company earnings in the form of capital gains and dividends when they purchase stocks. If you buy a stock from a particular company and its share price rises, you can profit from such a gain. However, the stock market involves risk, and you should consult a professional investor or company before investing.

Real Estate

Purchasing and owning a piece of property can increase your income. Making $70k can boost your chances of owning one and renting it or selling it to make a profit.

Bonds

These are suitable investment methods if you don’t like to take too much risk. Federal and state governments sell bonds to fund infrastructure projects such as parks. Bonds such as Treasury bonds are typically safe and secure, guaranteed by the complete confidence and credit of the US government.

Building wealth is a gradual process that takes time and discipline. With a $70K salary, you can generate wealth and early retirement if you develop a strategy to manage your money and avoid overspending on unnecessary purchases.