Do you dream of becoming a millionaire someday? Most of American society not only sees a seven-figure net worth as a great symbol of success, but they also believe this to be the point where you’ve finally achieved the status of being “wealthy”.
However, saving up a million dollars is not going to be easy. Some people work their whole lives and never amass this much wealth. For you to achieve this goal, you’re going to need to be very strategic with how you manage your finances as well as make some intentional sacrifices along the way.
In this post, I’d like to share my seven best ways to become a millionaire.
1. Contribute to Your Retirement Accounts
By far, one of the most straightforward paths to becoming a millionaire is to start contributing diligently to your tax-advantaged retirement accounts. These would be tools such as:
- Employer-sponsored plans: 401k, 403b, 457
- Self-directed plans: Traditional IRA, Roth IRA
- Self-employed plans: SEP IRA, Solo 401k, SIMPLE IRA
Fidelity has reported that more people than ever are becoming millionaires using this method. This is thanks to the compound interest effect that investing can have on the decades of contributions you’ll make during your career.
For instance, if you started making $500 contributions to your retirement plan and invested it in a stock market index fund earning around 10 percent per year, how much would you have after 30 years? Your nest egg would be worth $1,130,244. You can try this for yourself using this calculator here.
The other big advantage of utilizing your retirement plans is that you’ll delay paying taxes on both the contributions and earnings for decades until you finally retire. On top of that, workplace retirement plans can easily be automated and employers will often match contributions.
2. Get a Higher Paying Job
When doctor Thomas J. Stanley did his research for the famous book The Millionaire Next Door, he surprisingly discovered that most millionaires were just regular people who had figured out how to keep their costs down while earning as much as possible at their jobs. This allowed them to invest the difference and achieve millionaire status.
If you’ve got a job that seems to have a lot of career potential, then you’ll want to take some steps towards figuring out how to maximize your earnings. Most employers are willing to pay you more if you can take on additional responsibilities or become the go-to person for certain knowledge areas. Talk to your boss or HR department about potential opportunities.
If there are none, then perhaps it may be time to consider working for a different employer that can offer more room for growth. You may even want to think about switching careers altogether if you think you’d get better compensation for your talents in another type of profession.
3. Find a Side Hustle
Your job isn’t the only place that can help you earn your way towards becoming a millionaire. If you’ve got some extra time, special skills, or even just a lot of ambition, then you could find plenty of money-making opportunities through taking up a side hustle.
Side hustles can be literally any kind of activity:
- Virtual assistant
- Tutoring / coaching
- Freelance writing / editing / graphic arts
- Rideshare driving
- Delivering food or groceries
The great thing about side hustles is that they can be done on your own time and at a rate of your choosing. You can work on them as much or as little as you have time for them. Depending on how much you charge and how often you do them, you might be able to earn anywhere from a couple hundred to a few extra thousand per month.
4. Acquire Income Producing Assets
Do you own things that could potentially produce revenue? If so, then this could be another great way for you to accelerate your progress towards becoming a millionaire.
Assets like dividend stocks or REITs will send you quarterly payments. These can be bought from virtually any major financial institution or even robo-investment apps.
Rental homes are also another great way to receive income checks. You could purchase an investment property and then lease it out to someone every month. Or you could rent it out through a vacation property service like Airbnb.
5. Create a Digital Product
Do you have skills or knowledge that would be desirable to other people? Perhaps it’s how to make money online, do better in job interviews, or have more confidence?
If so, then maybe you could create your own digital product. Digital products can be anything ebooks to online courses or membership sites.
For instance, when blogger Michelle Schroeder-Gardner from the site Making Sense of Cents started producing significant amounts of money from affiliate marketing, her audience craved more information. So in response, she created the Making Sense of Affiliate Marketing e-course which has gone on to earn more than a million dollars!
6. Start Your Own Business
As most successful entrepreneurs will tell you, there’s no greater way to become a multi-millionaire than to start your own business. This could be anything from a traditional brick-n-mortar type of establishment to an online-only venture.
The great thing about having a business is that there are no limits to what you can do. You’ll get to decide what you’ll sell, who your customers will be, the price you’ll charge, and how you’ll go about making it all work.
The other reason business owners can become so wealthy is because of scalability. Instead of working at a job where you’re essentially making money for someone else, you can hire employees who will be making money for you. The more you can repeat this process, the bigger the potential outcome.
7. Have the Right Mindset
Finally, the most important aspect of becoming a millionaire is to see it as an achievable goal and to commit yourself.
This is something called the “millionaire mindset” that author Napoleon Hill wrote about in his 1937 classic Think and Grow Rich. After interviewing over 500 successful industry leaders, Hill concluded that the driving force of your millionaire mindset must be something you feel so strongly about that failing is not an option.
This means that having a millionaire mindset is more than just believing you’ll be rich someday. It’s about recognizing that good opportunities do exist, challenges can be overcome and then stopping at nothing to achieve your goal.
If you’d like to start determining how you can become a millionaire, then try using an app like Buxfer. Buxfer’s forecast feature lets you set a long-term goal and then change multiple factors to see how you can best get there. Click here to learn more about Buxfer’s Forecast feature.
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