How To Become A Millionaire (It's Simpler Than You Think!)

1. Develop a written financial plan

One of the main reasons why someone can never become a millionaire is that they haven’t written a financial plan. Developing a financial plan forces you to take action, instead of just talk. It also guides you in making the right decisions in order to achieve all of your dreams and goals.

Financial planner Scott D. Hedgcock said that, “When planning for a more secure future there are two inputs that are indispensable: how much money you have and how much money you spend.

“The basic point I want to stress about these two inputs is that they are absolutely fundamental to all financial planning regardless of how large either of them is,” Hedgcock said.

“In my experience, the biggest difference between those on the right path vs. those on the wrong path was the amount of time and effort they put into devising a plan for their finances.” But taking the time to create a plan and see it through “is the one thing all financially successful people have in common.”

Hedgcock added that, “The success experienced by those who do this occurs regardless of their relative wealth. Likewise, the failure of those who do not follow a plan is unrelated to their wealth.”

When creating a financial plan:

  • Focus on what matters most and don’t obsess over the past.
  • Focus on what you control by listing your known expenses first in your budget, and with the income left over, list the discretionary categories.
  • Focus on your future by anticipating how much your future self will need to survive.

Related: What It’s Really Like Once You Become A Millionaire

Video

4. Increase your streams of income

After studying the very wealthy for five years, author Thomas Corley discovered that 65 percent of self-made millionaires he studied had three streams, 45 percent had four streams and 29 percent had five or more streams. This could include starting a side business, working part time, making investments and renting out everything from your home to your car to household items.

Related: 7 Mental Shifts That Allowed Me to Become a Millionaire at 22

Can I Become Millionaire Overnight?

The only way to get rich rapidly is to win the lottery or another huge prize, inherit a fortune, or get a big surprise. Gaining riches in a day is unlikely in other settings. Ultimately, pursing this ambition may cost you more money.

Rarely is it viable to get wealthy in one day. Even if this is viable, it is unlikely to occur.

7. Work With an Investment Professional

Here’s a question for you: If you needed to have heart surgery, would you try to operate on yourself? Of course not. That would be dumb! You’d look for the best heart surgeon you could find.

And when it comes to something as important as your retirement future, wouldn’t you want to work with someone who knows what they’re doing? Working with an investment professional is one of the smartest things you can do for your money.

In fact, 68% of millionaires said they worked with a financial advisor to help them reach their net worth.9 You see? Building wealth isn’t a solo sport—and it’s wise to seek guidance from folks who know what they’re doing!

If you don’t have a pro yet, check out our SmartVestor program. It’s easy to use, and it’ll help you find investment pros in your area for free!

5. Cut Unnecessary Expenses

As you work toward becoming a millionaire, make sure you’re spending your money on purpose—and with a purpose.

More than 9 out of 10 millionaires say they live on less than they make and stick to the budgets they create each month. And get this: We found that 93% of millionaires still use coupons when they shop!6

So despite what you might have seen on some television show or heard on cable news, the average millionaire lives a modest life. They don’t waste their money on junk and things they can’t afford. Instead, they find ways to cut spending so they can save more for the future. Small sacrifices can lead to big results over time!    

So, take some time to go over your expenses and compare budgets from previous months. Where are you leaking money? Which budget categories seem to creep up over time? Here are a few places to look:

  • Insurance – Can you bundle car and homeowners insurance? Can you get better rates with a higher deductible? Shop around and find out. Sit down with an independent agent who can show you where you can save.  
  • Cable/Satellite – Ever heard of streaming services like Hulu and Netflix (and about 50 others)? Of course you have. Give them a shot—you can probably get the shows you want without cable.  
  • Gifts – Don’t give in to social pressure to buy over-the-top gifts for family or close friends. If you do, you’re putting pressure on them to return the favor!  
  • Restaurants – Here’s an experiment worth trying: For one month, eat every meal at home and skip that coffee you get every day on the way to work. You’ll be shocked at how much money you can save in 30 days!  
  • Subscriptions – Gym memberships, streaming music services, magazine subscriptions . . . honestly, how many of those do you really use? Try cutting a few of those monthly subscriptions from your budget.  

Just remember, whatever sacrifices you make now—big or smallwill go a long way to help you reach your dreams of becoming a millionaire. And you know what? Once you’re a millionaire (yep, you’re going to be!), you might just stick with the money-saving habits you started.

5. Make property your best friend

Inflation is a beast. Make it a goal to own a primary residence as soon as you know where you want to live for the next five to 10 years. If you put a 20% down payment on a home and it goes 3% up per year, that's a 15% return on your cash.

At 26, I used the lucky win I made from one stock investment and bought a two-bedroom, two-bathroom condo in San Francisco for $580,500. The mortgage has since been paid off and the property now generates a steady stream of income.

How to Become a Millionaire in 1 Year?

Each year, numerous individuals earn a million dollars or more through legal investments in various company portfolios. Other investments are also the ways to become billionaire in stock market in India like mutual funds, stock options, etc. All of these individuals share one trait: they are constantly willing to take business risks.

In reality, become a millionaire in a year is extremely rare unless you inherit it from a family member. Earning a million dollars in the United States in a year does not imply that it is easy; you must possess the necessary skill sets, as well as technical training in some instances. In America, you can earn a million dollars today and reinvest it to earn a regular income in the future.

Invest in Property / Real Estate

Learn how to invest in real estate with no money down and no risk. Numerous flips and flats are available.

All parties cannot win: tenants, contractors, and the dreaded housing bubble. Conduct as many transactions as necessary to be successful. Boom. Mostly people are using this method on how to become millionaire in India.

Start a Business / Be an Entrepreneur

Invest your time, effort, and Grey Goose in a business that is addressing a significant issue. Develop the secrets of the millionaire mindset and habits to be successful. It will be beneficial. If it does not work, repeat the procedure. You will lose everything if you behave recklessly.

Friendships, money, sanity, and health, to name a few. If you are not insolvent, you may be acquired within a few years. Boom. This is the best way on how to become a millionaire overnight or even become a billionaire.

How Much Do I Need to Invest to Become a Millionaire?

The amount you'll need to invest to become a millionaire depends on where you are in your life. You can afford to sock away less money when you're younger because you have more time to accumulate your wealth and you can tolerate more risk. If you put off saving until you're older, you'll have to put away more money every month.

Gauge your risk tolerance

What is your approach to investment risk? Asset allocation can be the most significant factor in the variability of long-term performance—sometimes even more so than security selection or market timing. Your risk tolerance—and your cash needs in the short-, medium- and long-terms—will drive an appropriate mix of assets for your investment portfolio.

Liquidity needs and time horizons

Group cash balances into three types based on your liquidity needs and time horizon.

Day-to-day Balances

  • 0-9 Months
    • Cash typically used for daily needs; may be subject to unforeseen expenses
    • Requires preservation of principal
    • Same-day liquidity

Reserve Liquidity

  • 9-18 Months
    • Fairly static; same-day access not reached
    • Cash set aside for possible investments, large purchases

Investable assets

  • 18+ Months
    • No short-term forecasted use

Talk to your J.P. Morgan Advisor about planning around your liquidity event and about a longer-term investment plan

© 2021 JPMorgan Chase & Co. All rights reserved. 

Don’t Let Lifestyle Debt Prevent You from Becoming a Millionaire

If there’s one roadblock on your way to becoming a millionaire, it’s lifestyle debt. This is debt, often charged to a credit card, to purchase everything from vacations to a night out on the town. A reasonable amount of debt that helps us buy something of lasting value, such as an education or a home, can be a smart choice. Going into high interest debt to buy things with no lasting value works against the goal of becoming a millionaire.

How to become rich fast

It is essentially impossible to become rich overnight. However, by spending less than you earn and investing the rest, it’s certainly possible to become rich over the course of several years thanks to compound interest.

Unfortunately, this means that if you’re looking for things like “how can I get rich in 5 minutes?”, there’s really no answer. Yes, even if you believe the superstitions about when your right hand is itching.

But by following the steps we went through earlier, you can become rich faster than you probably think. This is especially the case if you start investing sooner rather than later.

In fact, as you may have noticed from the table earlier in this article – which may be pretty unsurprising – the more you invest, the faster you’ll become a millionaire. 

But this table also showed that the earlier you start investing is actually a more important point, as it gives your money even more time to compound in value and build upon itself.

What is the fastest way to be rich?

The fastest way to get rich is to follow the steps we outlined above. That is:

  1. Pay off all high interest debt
  2. Limit your spending
  3. Start investing as much as you can immediately and consistently
  4. Boost your earnings, including by developing multiple streams of income
  5. Create short term financial milestones alongside your longer term one
  6. Monitor your finances and adjust as needed

This strategy has been proven to work time and time again when it comes to making people rich.

All those get-rich-quick schemes are absolute scams, as there is, unfortunately, no way to get rich by tomorrow. But you really don’t need to even consider these when the process of actually getting rich is as simple as the list above.

Sure, it will take some time. But by committing yourself to your ultimate objective of a certain net worth and staying the course over the coming years, you’ll quickly see the value of your investments start to grow.

(Plus, isn’t all that patience worthwhile when you consider that it’s been proven that money really does buy happiness?)

Surprisingly Simple Ways to Become a Millionaire

Simple tasks are not always easy tasks. If I were to hand you a spoon and ask that you dig a hole nine feet down into packed soil, that’d be pretty straightforward and simple but it certainly wouldn’t be easy.

Likewise, you’ll find some of these simple ways to be just that – simple but not easy. But come on, you’re tenacious enough for the job, right?

Jaime Tardy, author of Eventual Millionaire who has interviewed hundreds of millionaires has this to add , “One of the main traits of a millionaire is perseverance. The ability to KEEP GOING in the face of adversity even when the finish line is very far away.”

One last thing. Remember that many of these tips are surprisingly simple, don’t underestimate their effectiveness just because you’ve “heard that one before.” Put these babies to good use and watch your millionaire potential soar!

1. Work smarter and harder than your competition

Identify your competition. How hard are they working? What are some differentiators you can bring to your workplace or market?

Start by working smarter. There’s no use in working harder if your work isn’t effective at producing income – you’ll be spinning your wheels.

There’s no sense in selling ice cream cones on your front lawn in the dead of winter. Instead, set up a booth at the park in the sizzling summertime – you get the idea! Simple, commonsense changes can greatly improve your effectiveness.

Work harder than others are willing. We’ve all seen the guy or gal at the office who works harder than anyone else. Maybe they’re a little nerdy or a little too interested in their job – or are they?

Maybe they’re onto something. After all, aren’t they the ones getting the promotions? Aren’t they the ones who become the office linchpins?

I remember when began my career with A.G. Edwards & Sons in 2002, I was in a training class of around 55 people. After completing training a year later, our class was reduced to less than half. My fifth anniversary mark? Only five of us were left.

Most failed. Why? Because they weren’t willing to put in the hard work required.

I beg you to not be afraid of hard work. Not only will your boss feel better about what you’re doing for them – you will too.

I’m not afraid to die on a treadmill. I will not be outworked. You may be more talented than me. You might be smarter than me. And you may be better looking than me. But if we get on a treadmill together, you are going to get off first or I’m going to die. It’s really that simple. I’m not going to be outworked. – Will Smith, Actor

2. Learn from your mistakes and move on

Everyone makes them. I do, you do, we all do.

And believe me, I’ve made some pitiful mistakes.

Would you get suckered into two multi-level companies that go nowhere? Would you throw $8,000 into an online business venture only to lose it all? Those are just a couple of several investment mistakes I’ve made with my money.

Mistakes are difficult to swallow. I think our first gut reaction as human beings to the realization we messed up is to shift blame – to others or to circumstances.

The very best way forward is to admit we fumbled the ball. Are you willing to admit when you make mistakes?

Some people, when faced with their own inadequacies, beat themselves up. And you know what that does? It paralyzes them from making the decisions they need to make to achieve success.

It’s important to remember that . . . .

Only those who are asleep make no mistakes. – Ingvar Kamprad, Founder of IKEA

So, take the simple step to fess up and move on. Yes, it’s simpler than you think – especially once you have practice.  If you are still in the middle of a debt mistake one of the best things you can do is to stop paying interest by transferring your balance over to a 0% APR credit card.  This will free you up to hammer down on that debt instead of paying big interest payments.

Millionaires don’t give up because of a few silly mistakes. They press on toward the goal.

3. Build something new that you would love – and be sure to experiment

You can read book after book about how to research what your customers will love, and by the time you deliver it, they’ll already be bored with it.

If you’re the entrepreneurial type – I know I am – make sure to work on projects you can get excited about!

Chances are, if you create something that you’d use and love, others will too.

Millionaires understand that some of the best ideas don’t come out of costly research, they come out of a passion for making the world a better place.

Also, remember to experiment. Have fun! Some of my best ideas come out of experimentation.

In 1945, Percy Spencer experimented with a new vacuum tube while doing research for the Raytheon Corporation. He popped popcorn and melted a candy bar, and saw the great potential for this process which eventually culminated into the advent of the microwave.

Tim Cook, the CEO of Apple recently explained in an interview with Charlie Rose that it’s more difficult to edit than it is to create something entirely new. But I’ve learned that sometimes creating something new can be the best way forward to becoming a millionaire.

One of the things that I’ve been most excited about building  is my blog.  My financial planning practice was growing at a steady rate but after I launched GoodFinancialCents.com in 2008 my practice and revenue have grown significantly. Some of that is a direct result of getting new clients to my practice while the other more surprising revenue source has been directly from the blog.

A combination of advertising revenue and introduction to new business opportunities (because my name and face are all over the web) have been a huge blessing.

Here’s the thing you have to realize though:  I KNEW NOTHING ABOUT BLOGGING.

That’s right.  The launching of my blog was a total experiment and still is today.  I’m always testing different ways to monetize and build my brand.  Experimenting is the fun part!

You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new. – Steve Jobs, Former CEO of Apple

4. Learn to budget – or at least get help doing so

You know that I hate budgeting. Thankfully, my wife budgets like a pro.

Here’s a tip from one of the financial greats (a millionaire, to say the least):

Rule No.1: Never lose money. Rule No.2: Never forget rule No.1. – Warren Buffett, CEO of Berkshire Hathaway

If you don’t budget, I promise you’ll lose money to overspending.

Want to make yourself sick? Count up how much you’re spending on eating out, clothing, gadgets, and other delights and write it down. Then, start budgeting. After a year, look at how much you’re spending and compare with your initial count.

Yikes. Try not to lose your lunch.

A hugely important part of budgeting is ensuring you’re spending less than you’re making. And the only way to do that friends, is to track everything.

If you’re not a spreadsheets-kind-of-person, that’s okay. Just make sure you have some help.

6. Don’t believe discouraging people

As soon as you accept that you’re not going to become a millionaire, you probably won’t – you’ll settle for the ordinary.

Your beliefs about your future matter a whole lot, and will – in part – help determine your future.

After all, your beliefs affect your actions, and your actions affect your outcomes.

When you listen to discouraging people, you’re letting them accomplish their goal – to drag you down and ensure you don’t surpass their success. No good.

Instead, I suggest you prove them wrong – but be humble about it. Your results will speak louder than your words, I promise you.

I just love it when people say I can’t do it, there’s nothing that makes me feel better because all my life, people have said that I wasn’t going to make it. – Ted Turner, Founder of CNN

7. Save some of your income for a rainy day

If you’ve lived on this planet for any considerable number of years, you know that bad stuff happens.

Not only that, sometimes several bad things happen all at the same time. Talk about knockout power!

That’s why I recommend that you save some of your income for a rainy day.

Medical emergencies can last years.

Trees go through roofs.

Jobs can be lost.

Don’t get caught without an emergency fund. You hear?

What does this have to do with becoming a millionaire? I’ll tell you.

If you have an emergency and don’t have some liquid cash saved up in a savings account like one from Capital One 360, you’re likely to either go into debt (bad idea) or borrow from family members (very bad idea).

Don’t be the guy that owes his parents.

Don’t be the couple that drowns in debt.

Think of debt as the polar opposite of investing. Instead of you investing in companies, companies are investing in you – looking to make as much profit as possible by pulling it out of your wallet. It’s bad news people.

According to many experts, you should have around three to six months of expenses in your emergency fund – in bad times, I recommend you shoot for eight months.

9. Invest in your education

Your brain is your greatest asset. A strong education is the most valuable thing you have, so keep expanding your knowledge — even after college. Thanks to the Internet, you can now learn almost anything for free.

After completing my part-time MBA program, I continued taking courses to stay up to date with everything finance-related. That also fueled me to keep writing on Financial Samurai — and the more I did, the more money I made.

Tags