When you get to the next stage—that is, when you have between $25,000 and $100,000 to invest—you can take a multilayered approach to your investing. I like the following simple five-part formula.

1. Cash. The first money you save should be marked for emergencies. This needs to be put someplace that is secure but easy to access, such as a home safe or a safe-deposit box. The amount you should keep for emergencies depends on your personal situation: how much you typically spend, how reliable your income is, and so on. As a rule of thumb, though, I’d recommend about 10 percent of your investable net worth. If you have $100,000, that would be $10,000.

2. Income-generating real estate. I recommend buying and flipping real estate for everyone, even beginners. If you start when you have less than $25,000 to invest and make a few deals, by the time your investable net worth hits $100,000, you should have a pretty active, nicely profitable second stream of income.

3. Side business(es). If you didn’t want to get involved in a side business when you had less than $25,000 to invest, you should consider it at this stage. You don’t have to risk a ton of money. Invest $10,000 conservatively in a business you understand and see where that takes you.