Becoming a millionaire isn’t easy, but it’s actually a lot simpler than you might think. While yes, the average American earns about $53,000 a year, that doesn’t tell you the whole story. While having a high salary is a plus, that isn’t the only way to become a millionaire.
The path to becoming a millionaire doesn’t have to be hard, but it does require some intentional action from you. Here are the 15 steps you need to take to become a millionaire:
Step 1: Becoming a millionaire starts with an income
Before becoming a millionaire, you need to have capital. Capital is the money you need to get into other money-earning ventures, like opening a business or investing. For most people, that means working a 9-5 and earning a salary. While it’s not glamorous, it’s how you’d get your initial capital most of the time.
Step 2. Set up a budget
After you have an income, you need to set up a budget. A budget is a guide to direct every cent of your income. It would be best to aim to save about 15-20% of your income. Saving as much as you can is always goo, too. That is of course as long as you are taking care of your basic needs.
Step 3. Build an emergency fund
Nobody knows what will happen when you’re on the path to becoming a millionaire. You might get into an accident or have another surprise expense. Having an emergency fund will mean that your path to becoming a millionaire won’t be derailed by any tragic event. The median emergency fund for Americans is about $5,000.
You might be surprised to know that over half of Americans have less than three months’ worth of emergency savings. Put yourself ahead of the curve and start building yours if you don’t already have one.
Step 4: Eliminate debt, the #1 hurdle to becoming a millionaire
Debt is probably the number one thing holding them back from becoming a millionaire for most people. If you want to become a millionaire, then you should be trying to avoid debt entirely. If you are in debt, then you should be trying to pay it off immediately.
Here’s an article of mine on how to eliminate debt.
Step 5. Saving your first $100k will make becoming a millionaire faster
In finance, people often say that saving your first $100,000 is the hardest, and then everything becomes easier from there. That’s because once you have $100k saved up, you have the capital necessary to start earning even more money. This leads us to your next step…
Step 6: Invest
If you haven’t already, you should invest in different assets. These assets will earn you more money over time. The best thing about investing is that it requires little to no effort on your end, depending on what you invest in. You could become a millionaire by investing in the right assets without even lifting a finger.
If you’re still learning about investing, check out my list of the best books to read for beginners.
Step 7: Job hunt
Even when you’re investing, most of your time will probably still be spent at your full-time job. If you like your job, then you could ask for a raise or a promotion. But if you’re open to changing jobs and don’t mind starting over, try to seek a job elsewhere. Statistically, job-hopping will earn you a higher salary than staying in one job long-term.
Step 8: Get a specialized degree to make becoming a millionaire easier
This is an optional step, but a specialized degree will give you a high salary and job security. Many of the highest-paying jobs require specialized degrees or certifications. Doctors, lawyers, accountants, and engineers are a few example career paths that open up if you have advanced education. In fact, many millionaires have one of these careers.
That isn’t to say that a degree is necessary for a high-paying job, though. Many flight attendants, real estate agents, and even programmers who don’t have degrees yet still make a lot of money. Don’t think higher education is for you? Then check out my article on high-paying jobs that don’t need a degree for more options.
Step 9: Becoming a millionaire means getting better at managing your time
As you’re building your wealth and assets, researching and managing your money can take more and more time. Having a financial advisor or CPA will help you make the best decisions with your money. This will also allow you to focus on your main income-generating ventures.
Step 10: Set a realistic deadline.
Becoming a millionaire takes time and effort. Self-made millionaires didn’t get there overnight. Becoming a self-made millionaire in five years is a lot more realistic.
Step 11: Shift your priorities
Becoming a millionaire means getting into the millionaire mindset. This means valuing having and saving money over the things you’d spend it on. Millionaires focus on delayed gratification, living within your means and holding off on bigger purchases. Once you shift your priorities to building wealth, you’ll find that becoming a millionaire is a lot easier.
Step 12: Max out your retirement accounts
The best way to be a millionaire over time is to invest your money in your retirement accounts. By regularly maxing out your retirement contributions while you’re young, the compound interest will help you retire as a millionaire. This will ensure that you’ll be able to enjoy your golden years in comfort.
Step 13: The grind doesn’t stop with becoming a millionaire
Being a millionaire isn’t necessarily an endgame goal, sis. Just having a million dollars won’t let you retire early, especially in certain cities in America. After saving your first million, it’s good to aim to retire with much more than that.
Step 14: Avoid lifestyle inflation
A million dollars can take years to build but can be lost much more quickly. There are quite a few high-profile millionaires who have lost their fortunes. Having a million dollars isn’t your cue to live lavishly and make big purchases on the daily.
The challenge that many self-made millionaires face is lifestyle inflation. This is when they have a lot of money and then shift to a more expensive lifestyle. You should always try to live beneath your means, even when you’re worth a million dollars.
Step 15: Never stop learning
Becoming a millionaire takes a lot of learning and expert advice. That’s why you should sign up to join the financial fam. As a member, you’ll have personal financial advice from me sent right to your phone every week. Occasionally, I’ll even throw in a freebie here and there. The best part? It costs absolutely nothing, so what are you waiting for? Sign up today!