The 7-step investment strategy a 29-year-old used to build a $150,000 net worth on a teacher's salary

Israel Tovar, 29, has a six-figure net worth. Courtesy of Israel Tovar

• Israel Tovar built a net worth of $150,000 at the age of 29 on a teacher's salary of $65,000.
• He became motivated to build his net worth because he didn't want to get stuck in a job he hates.
• Here's the seven-step plan that helped him do it.

After graduating from Stanford and Yale debt-free with full-ride scholarships, Israel Tovar moved to Nashville to start his teaching career. 

Tovar knew he always wanted to be a teacher, but he didn't anticipate the mental and emotional toll of being the only queer teacher of color at a school that served low-income students of color. "I was getting paid $44,000 a year at a school that felt like a prison," he tells Insider.

Eventually, for his mental health, Tovar quit that job without a backup plan. Before landing his next teaching role that paid $65,000 in Washington, DC, Tovar created a detailed plan to build a six-figure net worth so that he would never get stuck at a job he hated ever again.

1. Tovar assigned purpose to his investments

"First, I had to clarify my 'why' behind investing," says Tovar. "I wanted to build a strong financial foundation for myself as a first-generation Latine teacher, so I can make my money work for me and have more options in my career life."

2. He researched investing terms

Next, Tovar researched investing terms like compound interest and index funds, which helped him better understand how to make his money work for him in the stock market.

With guidance and accountability from his sister, Sunem Tovar, he learned how the stock market works and how to pick investments based on his time horizon, goals, and risk tolerance.

3. Next, Tovar maximized his company match

Leaning on his sister, who had taken personal finance classes in school, Tovar maxed out the 403(b) retirement account and traditional IRA options at his school, investing primarily in index funds.

"I also took advantage of my school's 6% match, and planned to stay at that school for three years so the match could be fully vested," he said.

4. He simplified his investment strategy

Against his family's advice, Tovar bought his first house in Nashville at 23 even though he could barely afford it. His sister lent him $1,000 for the home appraisal and he used a home assistance program to help with closing costs.

"Initially, I decided to buy a house because, at the time, I believed that the only way to build wealth was by owning a property," he says. "The more I deepened my financial literacy and clarified my life goals, I realized that investing in index funds was a better option for me."

After owning the property in Tennessee for three years, Tovar realized that renting it out took a lot more work than he anticipated.

"I realized that I wanted to build wealth more passively; having a rental property required me to do a ton of work while investing in index funds didn't require me to do any work besides the initial purchase."

Soon, Tovar sold the home and put the profits directly in his brokerage account to invest in more index funds. 

5. Tovar focused on increasing his income while keeping his expenses down

When Tovar moved to DC for a higher-paying job, he shared a bedroom with a college friend in a shared apartment in the outskirts of the city.

He says, "My salary had increased by $15,000, and I was just hustling. I started getting all the side gigs as a teacher. I was like, 'Give me the homework center. Give me the after-school this and that.' I was just determined to get my money and build a six-figure net worth."

6. He automated his investments

Once Tovar had his emergency savings fund set up and felt secure in his day job, he automated his investments with every paycheck.

7. Tovar relied on community support along the way

Tovar's success was made possible by the support of his sister Sunem, who was the first in their family to get serious about her own personal finances. Together the Tovars have a combined net worth of $325,000. They also started a business called the Dream Teacher Project, where they show other teachers of color how to build wealth.

Says Tovar, "Having the Dream Teacher Project together, it helped us a lot in staying accountable. We want to make sure that our money's right because we want to provide our clients with the best coaching."