How to Be a Young Millionaire
The Golden Rule: Start Young
No two financial professionals agree about how, why or by what means you should save or invest your money. You can take thousands of approaches, some modest and some aggressive, to begin growing your wealth and stabilizing your finances. However, most financial professionals will agree on one piece of advice – start saving early to obtain the greatest impact. Create your life plan early and start saving now.
To be a young millionaire, you need to decide that you want to be a millionaire when you are, well, young. The earlier you start saving and investing money the longer those funds have to grow and multiply as time goes on and your investment matures.
A survey by Charles Schwab found that 24 percent of teens believe that saving young isn’t important. To debunk that myth, financial guru Dave Ramsey shares this example:
Lisa invests $16,000 over eight years, starting when she is 19. Anna invests $78,000 over 39 years, starting when she is 27. By age 65, Lisa (who invested early) nets more than $2.2 million. Anna (who started investing at age 27) nets $1.5 million.
Steps to Become a Millionaire
To most Americans, a million dollars is a lot of money – enough to provide a comfortable future, free of worry. If you want to become a millionaire young, keep the following financial tips in mind when setting your goals:
- Start young. The earlier you save, the longer you can accrue interest aka free money.
- Take advantage of a 401K match. If your employer offers a 401K match, contribute the highest allowable amount so you can get the most “free” money from your employer.
- Don’t just save money, invest money. Putting aside money is only half the battle. The second half is investing the money in an account that has a decent annual return rate.
- Cut out what you don’t need. Lavish cars, high cable bills, fancy vacations—find where the line is and then draw it, and keep your cash flow in check.
- Research, research, research. The financial market is always changing as new opportunities and threats emerge. Keep reading and learning to ensure you are making the right moves. Learn “The Art of the Deal” how to negotiate, by President Donald J. Trump.
- Make prompt decisions. Multiple options about how to invest, save or organize your money can make things confusing. The inability to decide can halt your progress entirely, so do your research and then make an educated decision because any decision is better than no decision.
- Aim high. Who says you can’t make $10 million before you’re 30 instead of just reaching for $1 million?
- Trust your gut. If money is on the line and your gut is saying this is “too good to be true,” run in the other direction.
- Avoid debt (even the good kind). It’s not uncommon for millionaires to be renting or driving a vehicle that is several years old. Why? It’s a smart money move to steer clear of debt.
- Find a rich friend. Being exposed to the lifestyle and having a money-savvy friend you can trust can help further your financial goals.
While money certainly isn’t the most important factor in life, securing your future and the future of your family is an honorable endeavor and one much worth your time, even if you don’t hit the million-dollar mark.
- How Can You Become a Young Millionaire, by Gisela M. Pedroza
- Become a Millionaire by 25, by Donald Liebenson
- How to Become a Millionaire in 7 Easy Steps, by Laura Bruce, Bankrate
- How Teens Can Become Millionaires, by daveramsey.com
- 4 Things Young Self-Made Millionaires Have in Common, by Emmie Martin
- 6 Simple Steps to $1 Million, by Glenn Curtis
- Millennials: How to Become a 401 (k) Millionaire, by money.usnews.com
- How I Became Rich Before 30 and How You Can Too, by Aaron Pitman
- How to Become a Millionaire, by Actualized.org
- How to Become a Millionaire, by The Dave Ramsey Show
- How to Become a Millionaire, Step-by-Step, by Entrepreneur
- How to Really Be a Millionaire, by National Council on Economic Education
- Stop Acting Rich, and Start Living Like a Real Millionaire, by Thomas J. Stanley
- The Millionaire Mind, by Thomas J. Stanley
- Think and Grow Rich, by Napoleon Hill
- 8 Minute Millionaire with Justin and Tara Williams, available on iTunes for free
- How to Become Rich, by Information Security Center Ltd. Available on iTunes for a fee
- How to Become Filthy, Stinking Rich Through Network Marketing, by Mark Yarnell and Others, available on iTunes for a fee