I’m a Self-Made Millionaire: 5 Stocks You Shouldn’t Sell

To grow his portfolio from $1,000 to $20,000, Williams needed to develop an actual strategy.

“Choosing winning stocks is actually incredibly hard,” he said. “I started to try to learn different investment strategies and eventually, I was led to this book, ‘The Simple Path to Wealth.’”

The book, written by JL Collins, a leader in the financial independence community, recommends buying index funds. Index funds are groups of stocks that match the performance of a stock market index, such as the S&P 500.

“This investment seemed a lot less risky, because over the last 100 years, the market has always gone up in the long term,” Williams said. “And so, because my stocks were starting to tank, I decided to withdraw all of them and put all that money into the Schwab Index Fund along with about $5,000 more.”

Index funds tend to experience smaller swings in value compared to individual stocks.

“As someone who is very risk averse when it comes to money, I really like this strategy,” Williams said. “Over time, I started to buy more and more index funds, eventually building a $20,000 portfolio.”

To grow his investment balance from $20,000 to $50,000, Williams said he created a “pay myself first” routine. At this time, he got a new job with a salary of $48,000 a year.

“Once I started to get paychecks, I sat down and created a plan,” he said.

Williams’ monthly take-home pay was $3,200 and his expenses totaled $2,300, which left him with $900 a month to save and invest. He decided that he would divide that $900 between his emergency fund, his brokerage account and his retirement accounts.

“What I was really doing was creating a payday routine that consisted of three simple steps,” Williams said. “First, get the money deposited into my account. Second, pay myself first, distributing the $900. And third, pay my bills. I did that once a month.”

By saving and investing the $900 before paying his bills, he ensured that he never spent money he was planning to save.

“Along with getting a generous 401(k) match, this is what I did to reach $50,000 invested,” Williams said. “It was a slow process, but steadily, over time, through consistency, I was on my way to building a respectable portfolio.”

Williams said that “something crazy happened” to get him from $50,000 to $70,000 — he ended up getting a 50% raise, which bumped his salary up to $72,000.

“I wanted to take advantage of this opportunity and not let it go to waste,” Williams said. “Instead of spending that extra money, I took about $1,600 a month and added it on to that $900, meaning I was now paying myself first $2,500 a month, which really started to make things this move.”

At this point, he had built an emergency fund, so he was living off $2,300 a month and was investing $2,500 — over 50% of his income.

“You never know when an opportunity will come, but when it does, it’s up to you to seize it,” Williams said. “I could have just increased my quality of life and saved nothing, but I didn’t. I stayed frugal, invested aggressively and went all in on building financial security.”

Having this financial safety net enabled Williams to quit his job and focus full-time on growing his YouTube channel.

At this point in his investment journey, Williams saw his portfolio balance decline from $70,000 to $60,000 as he lost the stability of his full-time job and was reliant on his income as a YouTube creator.

“In the first three months, I was making about $1,800 a month — not terrible, but nowhere near enough to pay my bills, nonetheless invest some money at the end of the month,” Williams said. “So the first year of doing this, I didn’t invest a single dollar because I was trying to bring this dream to life.”

At the same time, the stock market was taking a post-COVID nosedive, and Williams lost much of his market gains. Fortunately, he did have an emergency fund, so even though he was not able to invest more, he did not need to withdraw his investments.

Eventually, Williams started making more money as a YouTube creator.

“I decided I needed to stop making excuses and couldn’t delay investing any longer, which leads me to the final part of this story — $70,000 to $100,000,” he said.

After a full year on YouTube, Williams was making enough money to cover his bills — but not much more than that. However, he decided to “stop making excuses” and funnel as much money as possible into his investment accounts.

“For the next two years, I maxed out my Roth IRAs, even invested a bit more my brokerage, and now I’m in the process of opening a Solo 401(k) to keep building my portfolio,” Williams said.

Thanks to a market rebound and his disciplined investing, Williams has been able to bring his portfolio over the $100,000 mark.

“My portfolio is $103,49.51, and out of that, $67,936 is principal and $35,562 is interest,” he said. “That’s how I was able to build a six figure portfolio without making six figures. I started, I learned, I failed, I learned more. I came up with a plan. I followed through.

“I seized opportunities, I took chances, I stayed calm and I never made excuses.”

More From GOBankingRates

• I’m a Realtor: This Is Why No One Wants To See Your Home 

• 3 Things Retirees Should Stop Buying To Save Money Amid Tariffs 

• 3 Reasons Retired Boomers Shouldn’t Give Their Kids a Living Inheritance (And 2 Reasons They Should) 

• 4 Housing Markets That Have Plummeted in Value Over the Past 5 Years

This article originally appeared on GOBankingRates.com: Expert: How To Grow Your Investments to $100K in 5 Years on an Average Salary