So you want to be a millionaire, huh? Great! But is it realistic? Don’t you need a high paying job or a winning lottery ticket?
Well, we have good news for you. You can become a millionaire – and it has nothing to do with your family’s money – or lack thereof – or where you got your degree. It has everything to do with you.
8 Tips To Become A Millionaire
For The National Study of Millionaires, the largest survey of millionaires ever conducted, we spoke to more than 10,000 millionaires across the country about who they are and what they did to reach millionaire status.
It turns out that most millionaires share similar habits and principles. And that means you can start building the same habits and following the same principles today so you can be a millionaire yourself someday! Here’s a list of million-dollar habits:
- stay out of debt
- Invest early and consistently
- prioritize savings
- Increase your revenue to reach your goals faster
- cut unnecessary expenses
- Keep Your Millionaire Goal Front and Center
- work with an investment professional
- repeat your plan
If you follow in their footsteps, you too will be on your way to becoming a millionaire! Are you ready?
Stay Away from Debt
There is this idea floating around our culture that to get rich you have to take big risks. People think you have to take out business loans and open lines of credit to get ahead, and they justify this by calling it “leverage”—which is just a fancy word for borrowing money and getting into debt.
But here’s the thing: Loans are quick for your financial dreams. Every time you buy something on credit or take out a loan, you dig yourself a deep hole to get out of. That money (including interest) that you are sending to lenders is money you can invest for your future!
People who became millionaires had figured this out long ago. They didn’t want their most valuable wealth-building tool (their income) tied up in silly payments every month.
Here are the cold, hard facts: 9 out of 10 millionaires have never taken out a business loan, and 73% of millionaires have never carried a credit card balance in their entire lives. They’ll be the first to tell you that the main way to reach the one million-dollar mark is to avoid debt like the plague.
The bottom line is this: If you want to be a millionaire, avoid debt at all costs. And if you already have some, get rid of it and pay it off as soon as possible (Baby Step 2). Only “good debt” is no debt!
Invest early and consistently
The sooner you start investing, the higher your chances of becoming a millionaire. It’s that simple (thanks, compound interest)!
If you start paying $300 a month by age 25, assuming an 11% rate of return, you can become a millionaire by age 57. If you keep investing and retire after 10 years, you’ll be sitting on a lot of $3.2. Million nest egg. And that’s only $300 a month!
So, start investing when you are debt-free (it’s okay if you still have a mortgage) and have a fully funded emergency fund. no exception!
Maybe you’re in your 40s or 50s and you’re thinking, OK, this is great for those young people, but there’s no way I can get there. We want you to hear us loud and clear: no matter how old or young you are, it is never too late or too early to get started. Start where you are!
Make Savings a Priority
If You Have Already Started Investing (Baby Step 4), Way To Move On! When it comes to saving for retirement, the goal is to save 15% of your income in tax-advantaged retirement accounts such as 401(k)s and Roth IRAs. Not 5%. Not 10%. fifteen percent!
Why? Because if you want to become a millionaire, how much money you invest is as important as the actual act of investing. We found that Baby Steps Millionaires, who invested 15% of their income for retirement from the beginning of their journey to millionaire status, took about 20 years or less! Here’s how things will shake out:
The median household income in the US is around $68,000. So let’s say you invest 15% of that income for retirement, which is $10,200 per year, or about $850 per month. Invested over 30 years, assuming an 11% rate of return, that money could turn into $2.3 million. And pretending you don’t get an employer match and never had a single raise in your entire career (which is highly unlikely)!
Our research found that 70% of millionaires saved more than 10% of their income in their working years. He saved, and he saved a lot! How were they able to save so much? This is where the next two principles come in handy.
Cut down on unnecessary expenses
As you work towards becoming a millionaire, make sure you are spending your money on purpose and with a purpose.
More than 9 out of 10 millionaires say they live on less than they earn and stick to the budget they create each month. And get this: We Found That 93% of Millionaires Still Use Coupons When Shopping!
So despite what you may have seen on a television show or heard on cable news, the average millionaire lives a modest life. They don’t waste their money on junk and things they can’t afford. Instead, they look for ways to cut spending so they can save more for the future. Small sacrifices can lead to big results over time!
So, take some time to look at your expenses and compare the budgets of the previous months. Where are you leaking money? Which budget categories seem to be creeping up over time? Here are some places to see:
Insurance – Can You Bundle Car and Homeowners Insurance? Can You Get Better Rates With Higher Deductibles? Shop around and find out. Sit down with an independent agent who can show you where you can save.
Cable/Satellite – Ever heard of streaming services like Hulu and Netflix (and about 50 others)? Of course you have. Give them a shot—you can probably get the shows you want without cable.
Gifts – Don’t give in to social pressure to buy the top gifts for family or close friends. If you do, you are putting pressure on them to return the favor!
Restaurants – Here’s one worth experimenting with: For a month, eat every meal at home and skip the coffee you get every day on your way to work. You’ll be shocked at how much money you can save in 30 days!
Subscriptions – Gym Memberships, Streaming Music Services, Magazine Subscriptions. , , Honestly, how many of them do you actually use? Try cutting some of those monthly subscriptions out of your budget.
Just remember, whatever you sacrifice now – big or small – will go a long way in helping you reach your dream of becoming a millionaire. and you know what? Once you’re a millionaire (yes, you’re going to be!), you can just stick to the money-saving habits you started with.
Keep Your Millionaire Goal Front and Center
The stages of becoming a millionaire are the opposite of how most people work, which means you’ll see friends and family visiting places, working, and buying stuff. And if you spend too much time focusing on what they’re doing, you can get into big trouble with your own money.
Nearly half (49%) of Millennials say they are influenced by social media to spend their money. This means they are letting someone else’s highlight reel on their social media feeds decide how they spend their money. no, thanks! Don’t get caught up in the comparison culture. Fight tooth and nail against it. Let’s be real here: It’s time to stop buying stuff we can’t afford to impress people we really don’t like!
Millionaires have not gotten to where they are by playing a game of comparison. No. When it comes to spending, only 7% of them feel the pressure to be with their friends and families. Instead, they stay focused on their own goals and not worry about what other people are thinking or doing.
Instead of focusing on what you don’t have, focus on the things that really matter – family and friends, your church, your career goals, the legacy you will leave to your children. They will bring you far more joy than a new car or a destination vacation.
Work with an Investment Professional
Here’s a question for you: If you need heart surgery, will you try to do the operation yourself? Not at all That would be dumb! You will be looking for the best heart surgeon you can find.
And when it comes to something as important as your retirement future, wouldn’t you want to work with someone who knows what they’re doing? Working with an investment professional is one of the smartest things you can do for your money.
In fact, 68% of millionaires said they worked with a financial advisor to help them reach their net worth.9 You see? Wealth-making isn’t a lonely game—and it’s wise to seek guidance from people who know what they’re doing!
If you don’t have a professional yet, check out our Smart Wester program. It’s easy to use, and it will help you find investment professionals in your area for free!
Reframe Your Plan
To become a millionaire, you have to let time and compound interest work their magic. It’s a beautiful thing. And if you want to achieve your big financial goals, you have to focus on the small details over the long term.
What are we talking about? stay out of debt. Investing continuously. Avoiding the “I deserve” trap. Year after year. Wash, rinse, repeat. And guess what? You keep doing those things even after you hit that million-dollar mark, because that’s what money-smart people do. you keep going!
And if you want to know more, Dave’s latest book, Baby Steps Millionaires, doesn’t just tell you what to do. It also tells you why, how to do it and when to do it. Get a copy today to learn how to overcome the odds that hold you back from becoming a millionaire.
