How to 'grow your wealth with every paycheck,' from the author of 'Think Like a Breadwinner'

"What's most important is getting into the habit of putting some of every paycheck to work for you."

Jennifer Barrett is the chief education officer at Acorns and the author of "Think Like a Breadwinner."
Courtesy Jennifer Barrett

My friend Jessica still remembers the beautiful bracelet she got from her parents for her bat mitzvah, or Jewish coming of age ceremony, when she was 12. A couple of years later, for her brother's bar mitzvah gift, their dad opened an investment account for him and started teaching him how to invest so he'd have enough to help provide for a family one day.

Neither she nor her parents ever imagined that 27 years later, Jessica — who became a single mom at age 39 — would be the one supporting a family herself. While her bracelet gathered dust in a drawer, her brother's investment account continued to grow. Its value increased exponentially over time.

"I could have used that investment account," she told me recently. 

Women tend to invest less and later than men, meaning we can miss out on many of the benefits of allowing our money to grow over time, and we end up with significantly less wealth than men. Single women have an average of 32 cents for every $1 in net worth that men have, on average.

Pretty much everyone can benefit from investing, though, especially if you're looking to achieve financial freedom. And once you get into the habit of doing it regularly, you can grow your wealth with every paycheck.

The gender gap in investing and wealth-building

Women aren't often raised to think of ourselves as wealth-builders, or taught or encouraged to invest for ourselves, at least outside of contributing to a retirement account. Nor are we given the message of how critically important, and empowering, it can be to build our own wealth.

In the past, it was common for men to do most of the earning and investing for the household while women managed the household budgets. While that's changing, surveys find that parents are still more likely to teach their girls how to track their spending and budget, while they teach their sons about building credit and investing to build wealth.

Even media created by and for women tends to reinforce these outdated tropes about budgeting versus investing. Anne Boden, CEO of the British bank Starling, commissioned a linguistic study a few years ago of 300 money-related articles. She found that 90% of those aimed at women suggested spending less, while the majority aimed at men focused on investing and building wealth.

Pretty much everyone can benefit from investing, and once you get into the habit, you can grow your wealth with every paycheck.

So it shouldn't be surprising that while research shows women are almost equally as confident as men when it comes to financial tasks like paying bills and budgeting, men continue to be much more confident about their investing knowledge and more likely to invest in stocks — with only about 1 in 4 women saying they're comfortable with how much they know about investing.

The result is that many women end up waiting to put their money to work by investing it in stocks and bonds. One S&P Global survey found just 26% of U.S. women invest in the stock market.

A simple 3-step process for growing your wealth

Fortunately, it's never too late to retrain your brain. And that process starts with reframing how you look at each paycheck.

So often we ask ourselves what we can afford on our salary. But we should also be thinking about how to leverage each paycheck to grow our money so that we can start building wealth to ensure we can afford everything we want throughout our lives. Here's how.

Step 1: Make sure you're getting paid the most you can at any time

That means checking your market value — looking to see what other people in similar jobs in your area and industry are making — and ensuring your salary lines up. It also means advocating for yourself financially, and tracking and quantifying the value you bring to your employer, so that you have examples and numbers to back you up when you ask for a raise or go for a promotion

Step 2: Save and invest as much as you can from every check you get

That allows some of the money you earn to start earning more on its own. Ideally, you want to set aside 15% or more of your checks for your future, but you can start smaller. What's most important is starting.

Put some money into a high-yield savings account to tap in the event of an unexpected expense, like a car or home repair, or job loss. Most financial advisors recommend having enough to cover 3-6 months of basic expenses.

Suze Orman explains emergency savings

Video by Stephen Parkhurst

Once you have that secure foundation, invest. Buying stocks and bonds gives your money the chance to grow even more over time to really break the paycheck-to-paycheck cycle and start building wealth to cover future goals.

This doesn't require that you be a stock market pro who can pick the right stocks at just the right time to benefit. Consider this: The S&P 500 index, which tracks 500 of the largest companies' stocks, has returned about 10% on average for almost a century, or about 7% to 7.5% after inflation. That's an average. The market has gone up more some years, and down others, though every downturn has ended in an upturn. But that average return can add up over time. 

6 lessons new retail investors say they learned the hard way

Video by Helen Zhao

While you can't invest in the index itself, you can invest in an S&P 500 index fund that gives you exposure to all of those stocks, meaning you've essentially got a little bit invested in each one just by buying shares of the fund. With compounding — or, when the returns on your investments start earning returns of their own — you could about double your investment in a decade, or faster if you continue to regularly invest. 

Even if you do nothing else, investing in an S&P 500 index fund could provide diversification in your portfolio and a pretty decent average annual return. You can also invest in additional stocks and funds, as well as bonds, too, to broaden your portfolio.

Step 3: Make it automatic

One of the most effective ways to make investing a habit is by automating it. That's not just putting the most you can from each paycheck into your retirement account (at least enough to get any employer match money), but also transferring some money into an investment account for the midterm goals you have in the years, or decades, before. 

It's important to have a savings account to cover short-term goals and unexpected expenses. But once you've got those covered, funneling some money into stocks and bonds offers the potential for your money to grow significantly more over time.

Warren Buffett: Buy a cross section of America

Video by Courtney Stith

You don't need to start with a lot. As your income grows, the amount you invest can grow as well. What's most important is getting into the habit of putting some of every paycheck to work for you.

The money that's growing in the background of your life might one day allow you to start a business — or a family. It can help you afford a down payment on a home, or to travel around the world. It's money that can be used to take time out to care for kids or other loved ones. It's money that gives you choices and helps set you up to be able to provide the life you want for yourself, and maybe others, too. 

It can take some work to think about your paychecks differently — as the springboard for all your wealth-building efforts, and not just money to cover bills, expenses, and short-term wants. But making that shift, and starting to put more of each check into saving and investing for your future, can be worth it as each paycheck brings you closer to financial freedom and your future goals.

Adapted from "Think Like a Breadwinner" by Jennifer Barrett, published by G.P. Putnam's Sons, an imprint of the Penguin Publishing Group, a division of Penguin Random House, LLC. Copyright © 2021 by Bear One Holdings, LLC.

Jennifer Barrett is the author of the new book "Think Like a Breadwinner," and the chief education officer at Acorns, a saving and investing app with more than 9 million users. A contributor to Forbes, she's also written about money for publications like The New York Times, The Wall Street Journal, The Washington Post, and Newsweek. Jennifer has co-authored two other personal finance books and is a TEDx speaker on women, wealth, and breadwinning. She also advises three female-led start-ups and provides leadership coaching to female founders. Before joining Acorns, she was a personal finance editor at CNBC Digital, a GM at Hearst Digital, and editor in chief at DailyWorth, a financial media start-up targeting women. A proud breadwinner herself, she lives in Brooklyn with her husband and two sons. Read more at

More from Grow: