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
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 do I become a millionaire in 5 years? ›
Here are seven proven steps to get you wealthy in five years:
- Build your financial literacy skills. ...
- Take control of your finances. ...
- Get in the wealthy mindset. ...
- Create a budget and live within your means. ...
- Step 5: Save to invest. ...
- Create multiple income sources. ...
- Surround yourself with other wealthy people.
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 do you become a millionaire? ›
Invest early and consistently
The earlier you start investing, the more likely you are to become a millionaire. It's that simple (thanks, compound interest)! If you start putting away $300 a month beginning at age 25, assuming an 11% rate of return, you could be a millionaire by age 57.
How to make 1 million dollars in 10 years? ›
“Say you're going to average 10% a year on your investment return — you're going to need to save about $5,000 each month to save $1 million.” Moore recommends putting this money into an employer-sponsored retirement savings account, if possible.
How to be rich fast? ›
- 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.
7 tips for getting your first $100,000
- Figure out how much money you can safely save each month. ...
- Automate your savings. ...
- Maximize your employer-sponsored savings and investment accounts. ...
- Save your tax refunds and work bonuses. ...
- Pay off existing debt. ...
- Seek a raise or some other way to increase your income.
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 get a million dollars fast? ›
15 Ways to Make a Million Dollars
- Build an Online Business. What is this? ...
- Start a Side Hustle. ...
- Invest in Real Estate. ...
- Sell Online Courses. ...
- Start Freelancing. ...
- Sell eCommerce Products. ...
- Become an Influencer. ...
- Try Coaching or Consulting.
Once you have a successful business model, scale it up aggressively. Expand into new markets, leverage technology, and continuously innovate to stay ahead of the competition. Think long-term and be patient. Building vast wealth takes time, perseverance, and resilience in the face of challenges and setbacks.
10 Ways To Become a Millionaire
- Start a Successful Business. ...
- Invest in the Stock Market. ...
- Invest in Real Estate. ...
- Develop High-Income Skills. ...
- Save and Invest Over Time. ...
- Ride Economic Waves. ...
- Get Out of Debt. ...
- Cut Down on Expenses.
The key for most millionaires is to save money before spending it. No matter how much their annual salary may be, most millionaires put their money where it can grow, usually in stocks, bonds and other types of stable investments.
How to make money fast? ›
How to make money fast
- Become a rideshare driver. ...
- 2. Make deliveries. ...
- Take surveys. ...
- Pet sit. ...
- Sell clothes and accessories online. ...
- Sell unused gift cards. ...
- Earn a bank bonus. ...
- Help others with simple, everyday tasks.
Making $4,000 a month based on your investments alone is not a small feat. For example, if you have an investment or combination of investments with a 9.5% yield, you would have to invest $500,000 or more potentially. This is a high amount, but could almost guarantee you a $4,000 monthly dividend income.
How long does it take to go from 100k to $1 million? ›
The time it takes to turn $100k into $1 million through investing varies based on factors like the type of investments, the return rate, and whether returns are reinvested. Assuming an average annual return of 7%, and reinvesting all gains, it could take approximately 30 years to reach $1 million.
How long does it realistically take to 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.
Can I become a millionaire in one year? ›
“In my experience, you can't become a millionaire in a year,” said Syed Lateef, business coach and CEO of SyedBNB. “At least, there isn't a guaranteed way to achieve it.” He explained it all boils down to luck and circ*mstance. Not even exceptional talent or hard work can guarantee such rapid financial success.
What is the average age to become a millionaire? ›
The average age of a first time millionaires is 37, it has been found. In data released by Betway Insider, the average age of a first time billionaire is also revealed: and is a little higher at 51. So, if you're not quite there yet, what can you do to make your first million?
