Becoming a millionaire may seem like the zenith of success for most people, particularly if you’ve worked for minimum wage or struggled to get a raise. And while earning a million dollars today is more feasible in some ways than it was even 30 or 40 years ago, aside from luck and winning the lottery, it takes strategic planning. Experts weigh in on seven ways to set yourself to become a millionaire.
Invest a Lot, and Early
Perhaps the most tried and true method to earn a million dollars is to start investing as much of your income as you can, as early as you can, said Scott Alan Turner, a certified financial planner and consumer advocate with Rockstar Financial Planning. “The math behind becoming a millionaire is quite simple. Step one: smartly invest around $430 a month. Step two: repeat every month for 30 months.”
If this seems like a lot of money to put away, Turner points out that most people pay this much on a car payment each month. “Cars are wealth killers,” he said. The hard part is staying disciplined, he added. “It’s really hard to get rick quick. For earlier financial independence, many people save and invest more.”
The Later You Start, the More You Need To Invest
If you’re starting later in life, the amount you have to invest each month climbs, said Daniel Demian, financial advice expert at Albert. “Starting at age 20, you should aim to invest $364 per month toward retirement to hit a million dollars in savings by age 65,” he said. By age 40 that number has to increase to $1,444. By age 50, $3,439 per month.
Consider Index Funds
Not all investments are created equal. Lattice Hudson, a leadership mentor, business coach and founder of Lattice & Co., advises that you consider index funds. “It’s a large collection of stocks meant to monitor the overall market,” he said. “This is advantageous because you are not investing all of your money in a single company; instead you begin by acquiring a small portion of a couple companies with very low fees.” These funds consistently outperform more expensive competitors, he added.
Invest In Assets That Gain Value
To make money, you need to invest in assets that gain value over time, Hudson said, such as dividends or interest payments. “Try to invest in property with installments. This way you gain assets for a doable price every month, which can later potentially bring in passive income.”
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Pay Off High-Interest Debt
You aren’t going to get very far toward making money if your debts are still dragging you backwards. “Debt at 8% or higher can kill your ability to become a millionaire, because interest payments drain your bank account every month,” said Brittany Kline, personal finance expert. “Do everything you can to pay off all high interest debt as quickly as possible.”
Add Revenue Streams
If your current forms of income aren’t enough to get you to a coveted million or more, you’ll need to pursue additional revenue streams, according to Hutch Ashoo, founder and CEO of Pillar Wealth Management, LLC. “Consider beginning a side hustle or honing your marketable abilities to increase your chances of being promoted or getting a raise. Additionally, I recommend selling your unneeded items on eBay. There are numerous strategies to increase your income and contribute to your objective.”
Come Up With a Good, Marketable Idea
Another way to earn cash is to think outside the bounds of just making money, said Hudson. “Stop worrying about how much income you can generate and begin worrying about how many people you can help. This gives you the chance to get your innovative juices kicking and create a product or service of value.”
Such a product or service could ultimately be a big revenue generator. And if you do come up with one, “having a trademark for a well-known innovation might put you on the fast track to success.”
Becoming a millionaire takes focus and dedication, said Daniel Carter, marketing manager of Loanx. “Even seemingly insignificant expenses, like purchasing a gourmet coffee from a premium coffee shop every morning can quickly pile up and reduce the amount of money you can save.”
The truth is, affluence takes hard work. “One must live a disciplined lifestyle and adhere to a strict budget. This means that people who want to grow their nest eggs must make some sacrifices.”
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