Having a million dollars just isn’t enough anymore. Research indicates that to retire at 65 years old and live on an investment income of $100,000 a year, you will need to have $ 2.5 million on the day you leave work. If you reduce your spending to $65,000 a year, then you would need $ 1.6 million. For National Be a Millionaire Day, we decided to research How to Become a Millionaire and found twenty-five articles with these top 5 strategies in common.
1st place: Build a Business
The most common strategy mentioned in 19 of the articles was to increase your income by building a business or starting side hustle. Write down all your ideas to make more money. Ideally find something you love to do and create a way to monetize it into a business. It is important to increase your income and have additional streams of revenue until working a job becomes optional.
2nd: Save with Purpose
Coming in as the second most important action is to save…save…save. Save with intention. As you are starting to save, make sure it’s for the right reasons. It is important to have at least 6 months in reserves as an emergency fund especially in times of crisis. Setting up your account to automatically put away 15% of your income into a savings is a great way to start. Save until it hurts. Then, save to invest and increase your income.
2nd (tie): Invest Regularly
Tied for second with 18 mentions was to invest in real estate and to take advantage of all the tax benefits possible when investing. The articles constantly state to start as soon as possible. Use your money to make money. People can start investing small and leverage their savings with compounding interest. As you build wealth and knowledge in leveraging funds, you can quickly start investing in real estate. Make property your best friend especially over the long term. Keep your investments basic and manageable. Invest wisely.
3rd: Spend Responsibly
Spend less than you make and live frugally. If needed, begin looking for ways to reduce your spending. Cut unnecessary expenses. Learn to budget – or at least get help doing so. As you start to have more money, it’s temping to buy nicer things to keep up with the Jones. Don’t give in to a lifestyle inflation. It’s best to pretend you are are poorer than you are and show few signs of wealth. Don’t show off – show up. Live as far beneath your means as possible and even a bit lower. It’s important to carefully watch all your expenses big and small. Make responsible spending choices and so you earn more than you spend.
4th: Create a Written Financial Plan
In order to make all this happen, create a wealth vision on how to increase your income. Set realistic goals and visualize achieving them to become a millionaire. Develop a 90-day system for measuring progress and future pacing – A concrete timeline. Take time to relax and reflect on your financial goals. Put your plan on repeat. Make sure it also includes a spending plan.
5th: Avoid Unproductive Debt
As you are creating wealth, it is important to avoid unnecessary spending and debt. Get rid of “lifestyle creep.” Live below your means and lay off the credit. Pay off credit card balances since most cards come with high interest rates. Creating debt that will give you higher returns can be productive especially if you can borrow at a low rate and earn more that you have to pay. An example of this would be get a loan for a property and receive a positive net profit after paying the expenses and debt service. In addition, one could borrow at a low rate and lend the money at a higher rate of return. Until you are familiar with managing loans, it is best to pay off your expenses and lay off the credit. Shed any unproductive debt. Control your money (don’t let it control you.)
5th (tie): Have a Strong Support Network
On your journey to making millions, find your battle buddy to get help if you need it. Remember that office politics counts since your coworkers and managers may be the first people to recommend or refer you to a valuable connection. Network with like-minded people. Start hanging out with those you admire and associate with millionaires. They can assist in recommending where to get professional advice. Hire a financial adviser and work with an investing professional. Identify ideal mentors and partners. Most of all surround yourself with people who can help.