9 Secrets of Becoming a Self-Made Millionaire (on a Low Income) (2024)

Raise your hand if you want to be a millionaire. Did you raise it? Of course, you did, because who wouldn’t? But is becoming a millionaire possible on a low income? You would be surprised! What if I told you that it’s actually pretty easy to become a self-made millionaire? And no, you don’t need to be in a high-flying career with a salary of over $100,000 a year to make it happen— or to win the lottery.

No, you can actually become a self-made millionaire on a low income. In fact, you could probably make it happen with $15,000 per year or less if you manage your money properly.

All you need to do is apply the formula that I’m going to show you in this blog, step by step. Stay tuned, and I’ll reveal the real secrets of becoming a self-made millionaire on a low income with just time and common sense.

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How to Become a Self-Made Millionaire – The #1 Secret

First thing’s first, let’s address the elephant in the room… is this for real? Because I know that’s what you’re thinking right about now. This sounds way too good to be true, right? How can you possibly make a million dollars on such a low income?

After all, if you’re earning just $15,000 a year, it would take you around 67 years to even earn a million dollars, and that’s assuming you could save every penny and never spend a thing. How, then, can you turn that salary into millions?

That’s a valid concern, so let me address it straight away by revealing the most important secret: compound interest. Compound interest is the secret weapon that can turn your low-income salary into a fortune.

What is Compound Interest?

In a nutshell, Compound interest is the interest you earn on your interest. Confused? I was at first too. It’s easier to explain in an example, so let’s look at one.

Imagine you’ve invested $10,000 somewhere (let’s say a high-interest savings account). Now imagine that you earn 10% interest per year on that $10,000.

If that interest were “simple interest” (not compound interest), you’d earn $1,000 every year (10% of $10,000). After 5 years, you’d earn $5,000.

Compound interest is a little different. With compound interest, that $1,000 you earned in year 1 is added to your $10,000 to your savings account. Now, you have $11,000 in the bank earning interest so, in year 2, you’d earn $1,100 in interest. This again is reinvested and earns interest.

Under this model, after 5 years, you’d have earned $6,105.10— that’s significantly more than $5,000. The cool thing is, the longer this goes on, the quicker that pile of money grows. It increases exponentially.

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The upshot of all this is that even if you only invest small amounts, thanks to compound interest, your small deposits can turn into a huge fortune if you invest it for long enough.

Alright, so how much do you need to invest every month? And how long will it take for compound interest to make you millions? Find out with this interactive calculator.

Compound Interest to Make Millions

A good rule of thumb when it comes to making savings/investments is to put aside no more than 20% of your monthly income. Like I said, this guide is suitable for people with low incomes, so let’s assume that we’re earning just $15,000 a year, or $1,500 per month.

Ideally, a full 20% of that could go towards our savings, which is $300. Assuming you could deposit $300 per month into an account that earns compound interest, how long would it take you to earn a million dollars?

Wanna see how rich you’ll become? See the compound interest formula in the raw. (Warning: Math!)

I’m not great at math, so that article hurts my brain..fortunately, we don’t need math to work it out. There are lots of handy compound interest tools out there that can calculate how much money you can earn over time. We can plug the numbers into one and find out the answer.

I did just that, and here are the crazy results:

By making monthly deposits of just $300 at an annual interest rate of 10% on a monthly compounding interval, you’d have $1,036,180.31 in savings after just 34 years.

Right in time to retire happy and enjoy those golden years! That’s one heck of a nice retirement pot, right? You’d be a millionaire.

But some questions still remain: how and where do you invest your money to maximize your compound interest? What if you can’t afford to save $300 per month on your current income? And how can you become a self-made millionaire even quicker?

Don’t worry about all that yet, just read on and find out. I’ll be showing you the answers to all these questions in the next set of secrets to becoming a self-made millionaire.

Secret #2: You NEED To Side Hustle

On a low fixed income, to speed things up, yes you do.

If you want to save money, you’ve got to make money. I wish this was negotiable but having a low income could really hurt the timeline of the first million dollars. If your job doesn’t pay you as much as you’d like, just pick up something on the side to start.

There are a ton of side hustles out there that you can do to earn extra money around your regular 9-to-5 that could be fun, easy, and better yet it could open doors to even bigger things! Like a homegrown business, something you can quit your day job over happily.

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We’ve written about a lot of already right here on Merry For Money, but here are 5 of my personal favourites:

• Start your own doggy daycare business
• Pick up a freelance writing job
• Teach English online
• Get work as a transcriptionist
• Complete paid surveys for cash
• Make money with your car

Those are just a few ideas of ways to make money to get you started, but there are plenty more. I’d recommend checking out this comprehensive list of 40 ways to make quick cash for even more inspiration.

Any money you make from your side-hustle should be completely disposable, so put it straight into your IRA or whatever retirement savings account you’re using and invest it!

See Also

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Secret #3: Open a Retirement Account

Before you invest your money, you need to store it somewhere. That somewhere should be a retirement account. The reason: taxes.

Retirement accounts allow you to avoid paying taxes on your investment gains, which is important when you’re trying to invest your way to millions.

There are lots of different types of retirement accounts and you’ll have to determine the right one for you. Usually, the best option is a work-sponsored retirement account like a 401(k).

These accounts let you make pre-tax contributions to tax-deferred investments, which means that you’ll pay less income tax and your investment gains won’t be taxed until you withdraw the money in retirement.

If your employer doesn’t provide you with a retirement plan or you’ve already reached your maximum 401(k) contributions, an IRA is probably your next best option. You won’t pay annual taxes on investment gains with an IRA so you’ll be able to grow your gains faster.

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Secret #4: Invest in Low-Cost Index Funds

Probably the best way to invest the money in your retirement account and earn compound interest is to invest in low-cost index funds.

With all investments, there’s an element of risk involved as your potential for gains (or losses) ultimately depends on the performance of your investment stock. The great thing about index funds is that the chance of things going south is a lot slimmer than with many other investments, as they’re diversified.

Diversified basically means that they’re made up of a whole bunch of different investment properties. In other words, you aren’t putting all your eggs in one basket. This makes index funds less risky.

The other reason so many people recommend them as a great long-term investment is that they’re very hands-off, passively managed and come with low fees. Average fees are just 0.11% for index funds, whereas they’re 0.84% for mutual funds. Not only that, but they also usually perform better than actively managed funds over time.

To minimize your risk even further, it’s worth diversifying your portfolio even further by investing in several different types of index funds.

As a general rule of thumb, index funds made up of bonds are less risky than the ones that are made up of stocks but also offer less lucrative returns. Consider your risk tolerance when choosing where to put your money, but you can also try investing a little in both types to hedge your bets.

Secret #5: Save As Much as You Can

Remember how we said that depositing $300 per month could make you a millionaire in 34 years? Well, if you think 34 years is too long to wait, and you want to speed things up a little, don’t worry— that’s doable too.

The easiest way to speed things up is to simply deposit more money each month. For example, if you can deposit $600 per month instead, it would only take you a little over 27 years to be a millionaire.

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Of course, that’s easier said than done if you’re on a low-income and don’t have a ton of money to spare. So if this is the case, how can you maximize your contributions? That question brings us nicely onto secret number 6…

Secret #6: Increase Income

Another effective point is to simply increase your main income source or find a way to supplement it as mentioned in #2. You don’t need to save $50,000 a year or make 6-figures but having a regular income will help you save more. The important thing is just to make enough and side hustle enough to fulfill and match your 401k and retirement account of choice.

On a low income of under $30,000, it would be tricky to save to a million. If you can side hustle $12,000 extra with any of these profitable, easy home businesses then you’re good as gold every year.

Secret #7: Live Frugally

If you feel overworked as it is and you don’t feel like picking up a side income, you might still be able to invest more money (and thereby become a millionaire quicker) by cutting down on your expenses.

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Even if you feel like you already live frugally, there are probably a few ways you could shave some money off your regular expenditure. For example, you could try:

• Buying groceries wholesale (for less) and batch cooking meals
• Using coupons codes every time you shop
• Switching insurance policies to save money on car insurance
• Switching energy provider to save money

And so on… but you get the picture! If you struggle to stick to your frugal goals, a great motivational tool could be to try a money saving challenge. We’ve talked about this in-depth here!

Secret #8: Build Passive Income Streams

If working hard to save up and investing your pennies doesn’t sound like the right way to become a self-made millionaire for you, there is another way…a way that doesn’t require you to work hard, or even work at all!

I’m talking about creating long-term passive income streams. Passive income streams are money that goes straight into your bank account, without you having to do a thing. I know what you’re thinking: is such a thing really possible? Yep, you betcha!

There are lots of ways to build passive income streams, some of which are more difficult than others.

For example, one way is to write a great ebook and self-publish it on Amazon. If you do it right, your book will make hundreds (or thousands) of sales for years to come, putting passively-earned money straight into your savings account. We’ve written a guide to generating money self-publishing on Amazon, so check that out too.

There are also other, easier ways to create passive income streams, like by downloading ‘passive income apps’ like lock screen apps and game apps to your smartphone. These apps run in the background and collect valuable data on your browsing habits for market research, and then pay you for it!

These kinds of apps don’t pay life-changing amounts (we’re talking a few dollars a month), but if you stack lots of these types of passive income streams up, you can add a substantial amount to your savings pot. And remember: every dollar that you invest is worth a lot more than a dollar over time as that compound interest accrues!

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Secret #9: Have Patience

And that brings us onto our final secret… have patience!

You won’t be able to be a self-made millionaire overnight, but you will get there eventually. Just stick to the principles we’ve talked about, monetize your spare time, save as much money as you can, make sensible investment decisions, and wait patiently. That’s really all it takes!

Patience really is an important virtue when it comes to becoming a self-made millionaire.

Enjoy Your Millions Gurl! ?

Congratulations, you’re now on your way to becoming a millionaire! It might take time but if you follow the advice above and apply the formula, at the end of it all, you should have a savings pot with at least a million dollars.

After that, the only thing left to do is to enjoy your retirement in style! Buy a Lamborghini and a nice villa on the beach, or just spend it all on the kids… it’s up to you, you’re a self-made millionaire— you can do what you want!

Good luck and stay merry!

Make More & Take Charge of Your Money

6-Figure Income OnlyFans Masterclass: When Rose, top .1% of adult models on OnlyFans, reached out to me about her online course I was skeptical. Hundreds of course sellers & businesses want to work with me, I rarely say yes. But as I learned more about her humble background, OnlyFans modeling experience, her SIX figure earnings, 7+ year modeling experience, and mastery of how to succeed on OnlyFans, I was impressed. You can replicate her success too, check out Rose’s proven strategies on how to earn 6-figures on OnlyFans.