4 Steps to Go From Rags to Riches by Using Your Rags

Identify your current assets and put them to work building wealth

Photo by Karsten Winegeart on Unsplash

We all love a good rags to riches story. It gives us hope. If that person started from nothing and made it big maybe I can too.

The more compelling the initial poverty story, the more impressed we are by the rise. We feel tricked if halfway through the story we realize the writer leveraged some assets that we don’t have to bring about their rapid success.

The truth is no one gets rich without taking what they already have and turning it into something more. Let’s be honest, it is a lot easier to get rich if you have a lot of assets to begin with.

I graduated from college with a ton of debt. I married someone with even more debt. Then we both went to grad school racking up additional loans. Neither of us went on to lucrative careers. There were a couple of penny-pinching decades there. But we are now putting three kids through college debt-free, traveling the world, and technically are millionaires.

Rags to riches, right? Sure, and there are many crucial steps we took that got us to where we are today. But we also had a lot of luck and help along the way.

Do you want to be a millionaire? Take whatever rags life has given you and upcycle them into riches.

Step one: examine your rags

One person’s rags are another person’s riches. I was born into a loving family with two educated parents. Money was very tight, but I never went hungry and I always had a roof over my head. I’m white, cisgender, and heterosexual. I have no major physical or mental disabilities. Getting good grades took effort but was well within my skill set.

I was already rich in so many ways even when I was living on rice and beans and racking up crippling educational loans.

Some people have parents who gave them every financial advantage but left them emotionally bankrupt. Others don’t have loving or rich parents. Maybe you have loving and well off parents but they want you to make your own way to success so they aren’t giving you a dime. Or your parents are struggling so much it is your job to support them as well as yourself.

Get out a piece of paper and start jotting down the key elements in your life. Don’t stop to consider whether they are positive or negative just list them. Use the following categories to get you started but add everything you can think of.

  • family: parents, siblings, cousins, aunts, uncles, grandparents, others
  • friends: close and distant
  • education: formal and informal
  • race, ethnicity, skin tone
  • gender and sexuality
  • socio-economic status as a child and now
  • money: current balances of debt and/or savings
  • social networking connections
  • faith: religious connections from childhood and now
  • physical and mental abilities and disablities
  • trama: past and present
  • employment
  • physical items: car, laptop, steam cleaner, whatever
  • residence: where you live geographically as well as dwelling type and condition

Wherever you start your journey from, be realistic about your assets, good and bad. For better or worse this is what you have to work with.

Step two: recognize and cherish the good

What do you have going for you? Healthy body? Sound mind? Great friends?College degree? Trust Fund? Okay, probably not that last one or you wouldn’t be reading this article. Still, everyone has some assets material or immaterial. What are yours?

Go back to the list you made in the last step. Read through and put a check by everything that is an unquestionable positive. For example, if you are healthy physically put a check there. Try to do this first run quickly without getting too bogged down in evaluation.

Now read through your list again. Are there aspects of some of the items that are both positive and negative? For example, maybe you listed your car. It’s an asset but also a deficit because it needs repairs, the payments and insurance are killing you, and finding a parking spot every day drains your energy. Go ahead and put a checkmark but keep the negatives in mind for step three.

As you do your second run through your list adding checkmarks to assets, you will need to separate out and clarify out aspects of your list. Loving parents? A clear asset. Loving parents but they need your financial support due to disability? Separate this out into two items, adding a check to the positive.

If you find it helpful, put multiple checks by positive assets you consider most valuable so they stand out from the assets you perceive as less valuable.

Many of us don’t think of ourselves as having assets because we continually compare ourselves to others who have more. Put other people out of your mind as much as you can. What do you have that is of value?

Step three: reframe and flip the bad

Now it’s time to look at the negatives in your life. What’s holding you back? Debt? Fear? No money? Disability? A power structure stacked against you? These are real liabilities and it’s okay to feel the pain of having a longer road ahead of you than the person who started on third base.

Take a moment to acknowledge that the world is most decidedly unfair and people who deserve it way less than you have so much more. Wallow in that thought for a moment. The flip side, however, is that your success will feel so much sweeter when you acknowledge the deficits you had to fight through to reach it. Rags to riches is a popular genre for a reason.

Now remind yourself that many people more deserving than you have much less. One of the ways I am privileged is that I spent my childhood in the Philippines. My dad worked with people who lived in the garbage heaps and made their living picking through the trash. Seeing real poverty up close puts things into perspective fast.

Go back to your list and look at the negative items, those without a single checkmark. Are there ways to turn any of your negatives into positives?

One way to reframe is to use your deficits as motivation for change. Needing to pay child support might be a literal deficit but wanting to provide a good life in the future for your child is a strong motivator.

Maybe your negative life experiences have given you skills you can put to use or connections you can leverage. For example, if you are a recovered addict who has gone through a 12 step program this entire exercise has been easier for you because you already have practice in self-analysis.

Your trama might become the basis for a novel you write. The people you meet in a support group get added to your connections list and may lead to a job or other opportunity someday.

Student loan debt may be crippling you, but the cost-cutting skills you hone as you struggle to pay it down will give you the ability to invest a large portion of your income once your loans are paid off.

Reframe and add as many of your obstacles to your assets column as you possibly can. Training your brain to look for positives even in the shitty things life throws your way is an incredibly valuable life skill. If you are already good at this add it to your assets. If not, practice.

Step four: start putting your assets to work

Now you are coming from a growth mindset. You have acknowledged that you are already rich in some way and you are ready to get richer.

Think creatively about how you can leverage your assets.

  • Can you squeeze some money from your current budget? Invest. The power of compound interest over time is amazing.
  • Do you have good friends? Use your people to give you support and keep you going when times are tough. Network, lean on friends for job leads, advice, favor for favor type help.
  • Loving parents? Maybe you can move into their basement to save money on rent. Can they support you while you’re getting your business off the ground?
  • Skills or potential in some area? Get a side hustle going.
  • Trama in your past or present? Are there parts of your story that you can safely share? Thoughtful writing about your life experiences can be healing for you and extremely helpful to others going through a similar situation. It can also earn you real money if you do it well.
  • Do you have a college degree or even just some coursework that feels like a waste? Make use of your college career center even if you are years past graduation or looking in an entirely different field than your major. Join alumni groups and use those connections.
  • Do you own a car? In a pinch, you could live in your car like John Paul DeJoria did while starting his iconic John Paul Mitchell Systems. This may be extreme, but he did go from homeless to billionaire.

A college student I know couldn’t find a summer job in the covid constricted economy. His parents owned a pressure washer so he started his own business using it to clean things for people. He marketed his services on local social media pages and used every local connection he and his parents had to get the word around. He ended up earning much more than he would have in a traditional summer job and has a great bullet point for his resume.

Shortly before I born, my dad was attending college full-time days while working a 40 hour a week nightshift at a factory. Married with small kids already, he had no time to study and was failing a language class he needed to graduate. So he took his flashcards to work. He developed a system. Insert part into press with one hand and flip a card with the other. Pull lever, glance at card, and say answer. Open press and flip card to check answer simultaneously. Repeat. His manager let it slide because he still worked as fast as anyone else. He passed the class and went on to grad school.


  • Recognize the ways in which you are already rich and leverage them to make yourself richer.
  • Be creative in identifying your assets and putting them to work for you.
  • Be patient but persistent. Get rich quick schemes rarely work but frugal living combined with sensible investing can do wonders.
  • Use time to your advantage. Debt and investments both add up faster than you think. Avoid the one and embrace the other.
  • Your only race is with yourself. Stop asking yourself if you are doing better than Joe Blow. Ask if you are doing better than you were last year.
  • Embracing a positive mindset energizes you and helps keep you going for the long haul.

Writing, wondering, and wandering across three continents. Living, Learning, and Laughing along the way. https://tinyurl.com/MaryDeVries

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