From rags to riches – is it really possible?

Rags to riches. The story that so many books and movies are based on. The hero or heroine starts with nothing and, through either skill or luck, ends up with more wealth than they know what to do with.

But can this happen in real life? 

The answer is yes, but unfortunately it is very rare indeed. So it’s not realistic to hold out hope that it will somehow happen, especially if you are struggling with bad credit right now. For example, it’s not impossible that you could win the lottery one day, but the chances of you winning the National Lottery are 1 in 45 million and EuroMillions even lower at 1 in 139 million.

However, in this article we explain three things that you can start doing right now that will put you in the best financial position for the future, whatever your current circumstances. 

These three things are:

• Make as much money as you can;
• Save as much money as you can;
• Invest as much money as you can.

 

We can’t promise you riches, but if you follow the tips below, you will definitely start to move in the right direction financially.

 

Make as much money as you can

To start getting your finances sorted, the first thing to do is make as much money as you can. Which sounds pretty obvious, but there may be ways to make money that you hadn’t realised. 

Firstly consider your main job. If you are not happy with what you are being paid, it could be worth either looking for another job that pays more, or asking for a pay rise where you currently work. Both of these options can feel a little daunting, but if you are focused on making more money you will need to take difficult decisions and brave steps along the way.

But as well as your main job, take a look at whether there are other ways you can start making money. Two possible ideas to get you started are:

 

• A side hustle

A side hustle is work that you do in addition to your main job. There are many options available, depending on your skills and interests, and the amount of time you have available. The most common examples of side hustles are:

• Selling used goods online;
• Selling homemade products;
• Domestic services & DIY;
• Petcare;
• Childcare;
• Tutoring;
• Content creation – blogs, vlogs, videos etc;
• Translating;
• Delivery driving.

 

The current HMRC rules are that anyone running a side hustle can earn up to £1,000 per tax year without having to pay tax or National Insurance on those earnings. But if your side hustle income is greater than this you would need to register as self-employed with HMRC. 

Who knows, perhaps your side hustle could develop into a business earning you significant extra income.

 

• Renting space in your home

If you have some unused space in your home you could put this to good use and make money from it. The most common way to do this would be to rent out one or more rooms to a lodger. Under the government Rent a Room Scheme you could earn up to £7,500 per year tax-free from letting out furnished accommodation in your home. 

You can find more about the Rent a Room scheme on Gov UK

Other possible ways of making money from your home include:

• Offering bed and breakfast (eg AirBnB) from your home;
• Offering office or storage space at your home;
• Renting out your driveway for others to park;
• Renting out a variety of household/technical items via sites such as Fat Lama.

 

There are many opportunities to use everything you have to make a bit of extra money if you are willing to do so.

 

Save as much money as you can

Saving money is an essential habit to get into if you want to become comfortably off. And there are two ways in which we mean saving money. The first is spending less money and the second is building up savings.

 

• Spend less money

There’s a lot of truth in the old saying “take care of the pennies and the pounds will take care of themselves”. And you may well have noticed that people who are good with money, and seem to have lots of it, are usually very careful about what they spend. 

So, starting right now, make every penny count. Our recent article Ten Tips for Improving your Finances in 2025 contains lots of tips about how to create a realistic monthly budget, reduce your bills and trim down your spending to live within your means. If you want to get richer, start by finding every opportunity to spend less money.

 

• Build up savings

As well as spending less money, decide where you are going to start building your savings. Set up a separate savings account to keep the money away from your day to day spending. 

First of all get into the habit of making regular payments – such as a monthly direct debit – into your savings account. Then boost these monthly payments as often as you can with bits of extra money such as bonuses, tips, gifts, wins, or refunds. 

You can also make saving money more interesting and varied by adding in extra money-making activities from time to time such as car boot sales, trading-in used or vintage goods online, or selling old technology. 

Also why not set yourself specific savings targets by temporarily not spending money on a particular item? See our recent article Are You Ready for a No-spend Challenge for ideas on this.

 

Invest as much money as you can

Investing money is the point at which you could start to see your money grow significantly. However, investments that could potentially earn you a lot of money are usually not without risk, and therefore need to be considered very carefully. The unfortunate truth is that if something seems too good to be true, it probably is.

So it’s important to understand that investing – particularly the riskier investments – should only be seriously considered if you are already managing well from month to month, have no major debts, and have built some savings to fall back on. 

But what exactly is investment, and what kind of things can you invest in?

Investment is putting your money into a source with the specific aim of making money from it. Types of investment include shares, bonds, funds, new businesses, property or crypto currency.

Most investments should be seen as long term, meaning that you won’t usually get your money back any time soon. The key thing to understand is that, whilst investments have the potential to make you a lot of money, any investment can go down as well as up, and some investments can fail altogether.

So investing is generally a less secure financial option, and carries a risk that you will lose your money. However, some investments are more risky than others, and we’ll take a quick look at different types of investment now.

 

• Less risky investments

All investments need money left in them for a while before you see any significant return. So that is an important factor to bear in mind. But if you are able to put some money aside and want it to earn more money three possible less risky options are:

 

• Property

Whilst property investment schemes can be risky, putting money into your own property is usually a safe strategy. Whether it’s paying extra into your current mortgage to get it paid off quicker, or moving to a larger property that is worth more, this could be a sound longer-term investment.

 

• Fixed rate bonds

If you are able to lock some money away for, say, five years, you may want to look at fixed rate bonds. Fixed rate bonds are a type of savings account that offer a guaranteed rate of interest, provided you lock your money away for a set length of time. They are a bit of a gamble in that if interest rates for savers rise during the investment period, your savings could be earning more elsewhere. But if interest rates fall, you will earn more than other savers. And, whatever happens to interest rates, your original investment is safe.

 

• Premium bonds

Another type of bond is the premium bond. Premium bonds are offered by NS&I (National Savings and Investments). They do not pay any interest, but instead your bond numbers are entered into a monthly prize draw, with the winning numbers selected by the computer ERNIE (Electronic Random Number Indicator Equipment). The draw pays out tax-free prizes of between £25 and £1million, and NS&I calculate the average prize rate is equivalent to 4% interest on your investment.

Premium bonds need to be bought in multiples of £25, and can be applied for online, by phone or by post. The original value of your investment is protected and you can cash in some or all of your premium bonds at any time.

 

• More risky investments

There are a range of riskier investments available, which may yield higher returns but may also lead to you losing money. We list a few of these below, but if you are interested in finding out more we would recommend you take financial advice.

 

• Stocks and shares

You invest money in a company by buying shares in it, and then sharing its profits or losses. Two ways you can invest in stocks and shares are either through a trading platform or via a stocks and shares ISA. 

 

• Crowdfunding

Another way to invest in companies is to put money into crowdfunding projects. Crowdfunding is most often used by startup companies or growing businesses. You can participate in crowdfunding with just a small amount of money, but to generate significant returns you would need to invest more money and would therefore face more risk.

 

• Cryptocurrency

The most well-known digital currency – or cryptocurrency – is Bitcoin. There are currently around 19 million Bitcoins in circulation, and only 21 million will ever be released. In general, the value of Bitcoin continues to rise and rise, but expert opinion is divided as to whether Bitcoin is a good investment for 2025.

 

We hope that this article gives you some ideas and inspiration about how to start making, saving and investing more money. Whilst this won’t take you from rags to riches overnight, over time it will help you to strengthen your financial position and begin to realise some of your dreams.

In the early stages you may need additional funding, perhaps to pay off debts or settle other financial commitments. If so, remember that Loans 2 Go offer a range of personal loans – including loans for bad credit – which may be able to help.

For more helpful financial and lifestyle tips, visit us here again soon at Loans 2 Go.