Becoming a millionaire isn't as far-fetched as you might think! There are plenty of high-net-worth individuals out there who started at the bottom and worked their way up to the top, so why can’t you do the same?
There are plenty of high-net-worth individuals out there who started at the bottom and worked their way up to the top, so why can’t you do the same? You need to follow certain rules and take actionable steps toward making your own wealth. Here’s how you can become a millionaire in five years or less.
1. Select your Niche
A niche is a particular field, interest, product, or service that you want to write about. For example, if you are a personal finance blogger then your niche would be money and finance. If you are an interior decorator your niche would be home design and furnishings. Choosing your niche is important because it will help you focus on topics that are going to be of interest to your clients.
2. Put aside 20% of your income every month
If you want to become a millionaire, you need to start saving now. The best way to do this is by automatically putting 20% of your monthly income into an investment account. This way, you will have substantial savings that can be used for retirement and other goals. For example, if you put away $1,000 every month over the next five years, that's about $60,000!
3. Don't spend anything other than essentials
One of the best ways to save money and become a millionaire is by living below your means. It's simple - if you want to reach your goals, you'll need to sacrifice some luxuries and spend on the things that are most important to you. Spending less than you earn will lead you straight towards financial independence, which is what many people aspire to be.
For example, if you make $50,000 per year, try to live on $40-45,000 per year. If you can't do that for some reason (e.g., childcare), try for an even lower amount like $30-35K per year.
Start saving! The more savings you have available to use as investment capital, the more money will start coming in from different avenues of income. When saving doesn't feel like it’s worth it because we're not making much progress, it’s time to revisit our goals and reassess where we should be spending our time and energy!
4. Get out of debt as quickly as possible
It's important to get out of debt as quickly as possible. When you're not saddled with that weight, you can take on the dream of being a millionaire. Here are some steps to get out of debt:
- Paying off high-interest loans first
- Don't put your money into anything but investments and savings until your debts are paid off.
- Create an emergency fund with three months' worth of income saved up for emergencies.
- Only use credit cards when absolutely necessary. Make sure to have a plan for paying them off before the next statement date so you avoid paying any interest fees.
5. Start building Passive Income Streams
In order to become a millionaire, you need to make $1 million. There are many ways of doing this, but the most common ways are through real estate investing and starting a business. Real estate is often seen as being expensive for an individual investor because it can require a down payment of around 20% to 30%.
One way to get around that is by buying with other investors in what’s called joint venture arrangements. For example, if there are four investors and each invests $100k they can collectively buy a property worth $400k that only requires one down payment.
Similarly, starting your own company usually requires money upfront for things like developing the product or service, marketing materials, and operations before any income starts coming in.
FAQs
Automating savings, creating specific savings goals, and minimizing unnecessary expenditures are effective tactics in building a substantial savings portfolio. Consistent saving, coupled with prudent investment, forms a powerful combination in accelerating the journey to millionaire status.
How can I be a millionaire in 5 years? ›
Automating savings, creating specific savings goals, and minimizing unnecessary expenditures are effective tactics in building a substantial savings portfolio. Consistent saving, coupled with prudent investment, forms a powerful combination in accelerating the journey to millionaire status.
How to get 1 million in 5 years? ›
Saving a million dollars in five years requires an aggressive savings plan. Suppose you're starting from scratch and have no savings. You'd need to invest around $13,000 per month to save a million dollars in five years, assuming a 7% annual rate of return and 3% inflation rate.
How to become a millionaire quickly? ›
8 Tips to Becoming a Millionaire
- Stay away from debt.
- Invest early and consistently.
- Make savings a priority.
- Increase your income to reach your goal faster.
- Cut unnecessary expenses.
- Keep your millionaire goal front and center.
- Work with an investing professional.
- Put your plan on repeat.
“Beyond entrepreneurship, no conventional career path — even medicine, law, or engineering — generates a million-dollar income for a newcomer in only a year.” So, aside from a lucky crypto investment or a windfall of some sort, Kellzi said becoming a millionaire is highly improbable.
What is millionaire in 5 days? ›
Millionaire Mind In 5 Days is a straight-talking guide to overcoming the negative conditioning, thought processes and bad habits that have been preventing you from fulfilling your potential and setting you on a path to supreme health, wealth and happiness.
How much money do I need to invest to make $1000 a month? ›
A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.
Does $5 million make you rich? ›
This sum of money would quickly put you in the top 1% of the U.S., according to Fortune magazine. When you consider how wealthy the U.S. is relative to most of the world—for instance, $57,000 of net worth would put you in the top 1% in the Philippines—$5 million is an enormous number.
How to turn 100k into 1 million? ›
If you keep saving, you can get there even faster. If you invest just $500 per month into the fund on top of the initial $100,000, you'll get there in less than 20 years on average. Adding $1,000 per month will get you to $1 million within 17 years. There are a lot of great S&P 500 index funds.
How to make a 100k? ›
How to make $100k a year
- Choose the right industry. The first step in earning at least $100,000 in salary is to choose a career in a more lucrative industry. ...
- Pursue a high-paying career. ...
- Consider your expenses.
- Move to a high-paying city.
- Invest in education.
- Add revenue streams.
- Negotiate your salary.
- Invest. The goal of investing is to buy assets that may provide financial growth over time. ...
- Take advantage of compound interest. ...
- Create a plan and follow it. ...
- Start a business. ...
- Cut spending. ...
- Try taxing yourself. ...
- Consider additional education. ...
- Take calculated risks.
The advice is really simple, but reaching the goal is challenging.
- Develop a written financial plan. Saying you want to be wealthy won't get you there. ...
- Get into the habit of saving. ...
- Live below your means. ...
- Stay out of debt. ...
- Invest in ways that work for you. ...
- Start your own business. ...
- Get professional advice. ...
- Bottom line.
How To Get Rich
- Start saving early.
- Avoid unnecessary spending and debt.
- Save 15% or more of every paycheck.
- Increase the money that you earn.
- Resist the desire to spend more as you make more money.
- Work with a financial professional with the expertise and experience to keep you on track.
Getting out of debt, investing consistently for retirement, and getting your home paid off quickly are the three keys to going from zero to millionaire in two decades or less. That's the formula that has worked for thousands of millionaires all over the country—and it can work for you too!
Is 1m a year rich? ›
Have you ever wondered who makes a million dollars a year? Making a million dollars a year or more puts you in the top 0.1% of income earners in the world. A top 1% income is over $650,000 today in America. With such an income, you should eventually have at least a top 1% net worth of over $13 million per person.
How much to be rich? ›
According to IRS standards, a monthly income of approximately $45,000 qualifies someone as wealthy. However, if you're aiming for the top 1% as measured by the Economic Policy Institute (EPI), you'd need to earn about $68,277 monthly.
How quickly can I become a millionaire? ›
The time it takes to become a millionaire depends on how much you save and the return you get on your money. If you invest $1,000 per month and get an 8% annual return, you'll be a millionaire in 25.5 years. The key to being a millionaire is to start investing right away and to be consistent about it.
How long does it take to go from 100k to $1 million? ›
The timeline for achieving this goal depends on your returns. For example, a 10% average annual rate of return could transform $100,000 into $1 million in approximately 25 years, while an 8% return might require around 30 years.
How many years can it take to become a millionaire? ›
It takes 32 years for the average person to become a self-made millionaire. Here's why that's a good thing.
How many years will it take me to become a millionaire? ›
This is according to a study conducted by Ramsey Solutions, which is the largest study of millionaires to date. The average age of a millionaire is 49 years old, which means it takes them over 27 years of saving and investing to reach this status. This may seem daunting, but the truth is, it's never too late to start.
