The Really Quite Good Guide to Become a Millionaire

Growing up I had dreams of becoming a millionaire, because then I could own fancy cars, big houses, and golf at beautiful locations around the world.  Quite honestly I thought that picking the right stocks and having a high paying job were all the tips I needed to become a millionaire.  Turns out my financial journey to become a millionaire was far from anything I had dreamed of.

I remember during college while I was working at the golf course and occasionally caddying for Michael Jordan I was an intern at Merrill Lynch for a financial advisor in Chicago.  Because I was a broke college student paying for school through student loans and working during the summer I was an intern one day a week.  

Become a millionaire blue sign

While I had met many millionaires before while working at the golf course (presumed millionaires) I confirmed my first real millionaire working at Merrill Lynch.  My boss asked me to pick up the copies from the printer.  To my amazement it was his very own portfolio and the balance exceeded 1 million dollars.

Unfortunately I never really knew the whole story.  Was my boss leasing his Lexus SUV?  Did he have credit card bills that he could barely make the payments each month?  Did he pick the right stocks to reach to become a millionaire?  Did my boss make a large six figure income each year?

What I really learned is to become a millionaire you need to invest.  Beyond that I gained through experience over the last 20 years.  Here are the steps I have taken to become a millionaire and a couple I wish I would have listened to along the way.

Don’t get in debt  

I started with failing the first tip to become a millionaire.  I came out of college with a finance degree and around $60,000 in student loan debt.   The opposite of don’t get into debt.

During this time I also borrowed money from my parents for almost $40,000.  Then shortly after getting what I would consider my first real job I bought a $20,000 Mercedes Benz.  I’m not even counting the credit cards💳 which I always had a balance.

Add that up and yes I was in debt over $100,000.  This prevented or at least delayed me from buying real estate.  Investing in the stock market (at least for any large amounts).  Starting a business on my own. 

Now I certainly could have done all those things, but the reality of it was my debt weighed me down.   

So if you are just starting out especially and a reminder to those who have struggled with debt in the past.  Avoid getting into debt.  

Get out of debt quickly

If you are reading this you are probably in debt just like I was.  The good news is you can get out of debt.  It may take months (good for you) or years (join the club), but you can get out of debt rather quickly.

Really it all relates to a simple math problem.  Income minus expenses equals the amount and speed of which you can get out of debt quickly.  The reality is so much of personal finance is your behavior. 

[tweetshareinline tweet=”So while it’s a simple math problem personal finance seldom comes down to plus and minus.” username=”33f244daae43bde1544be05b3cdc5190″]

If you are looking for ways to pay off debt quickly there are a number of resources on the internet, right here on my website, and something I highly recommend which is working with a financial coach.

Should I go into debt to become a millionaire?

Debt is the part of many millionaire stories including my own.  When I speak of debt I am referring to consumer debt, most of which is going to slow you down on the simple path to becoming a millionaire. 

Here are my thoughts on what I think of debt as a path to becoming a millionaire:

  • If you have credit card debt it has to go, rip it off like a band-aid.
  • Car loans are dangerously close to credit cards from my point of view.  While if done correctly credit cards and car loans can be used as a tool.  However most Americans tend to get big car loans because of interest rates and they can afford the payment.  Pay these off quickly as well.
  • Student loans while usually low interest rates I’m going to lean towards paying them off rather quickly as well.  Each situation will vary as personal finance is personal.
  • Business loans are certainly one way to start and quickly scale a business, but I don’t have any experience in becoming a millionaire through this method.  
  • Mortgage loans for your personal residence are fine to pay the regular payments for the next 15-30 years.  In most cases I recommend keeping your low interest mortgage loan.  For most Americans this is a primary automatic wealth builder.

Are there examples of individuals using credit cards to buy houses and later become millionaires?  Sure.  But it’s not without risks and incredibly difficult to repeat.

Track your expenses 

This is always my golden ticket to the start of getting your financial life on track.  Not only getting it on track but keeping it on track as well.

I’m famous for telling my clients:

“I don’t care what you spend your money on, I only care that YOU know what you are spending your money on.” 

Warren Buffett Become a Millionaire

Warren Buffett says to track your expenses 

I mean yes I’m clearly the Warren Buffett of tracking expenses.

To me this is the one rare item that everyone can do.  You can keep it old school with a check register or piece of paper, semi-old school and Microsoft Excel and a online bank statement, or new school and a fancy website or app on your phone.  

Why is this included in tips to become a millionaire?

  1. It allows you to see how much you are spending📊
  2. Then decide if you want or need to spend less📉
  3. If you spend less you can save money💰 and invest more📈
  4. Saving money and investing more are crucial in your pursuit to become a 💸millionaire💸

Lower your expenses

Once I started tracking my expenses I quickly realized that I was saving almost nothing and my debt was killing me softly like some sort of Fugees song.

So if you are following along here you know that lowering your expenses is going to help in your pursuit to become a millionaire.  Let’s be really clear tracking your expenses is not going to make you a millionaire, it’s a tool to help you get there.

When I first tracked my expenses and saw how much money was going out, I knew changes had to be made.  Some people would consider me crazy🤪 and some maybe say I was ahead of my time but I decided to sell, cut, share, and borrow to reduce my expenses.

 Here’s a list of a few “crazy” things I did:

  1. Sold my car and took public transportation, rode my bicycle, and walked everywhere
  2. Lived in small sized apartments, shared an apartment with Craigslist roommates, lived with family, and spent considerably less on any housing that my income would support
  3. Cut cable.  For a while I was using the library for borrowed DVDs as my only form of TV.  I made what I thought was a dramatic move like a decade ago and bought a Roku and streamed everything, sometimes even “borrowing” usernames and passwords for live sporting events.
  4. Moved on from an expensive big cell phone carrier and chose one that wasn’t very well known with services that ran mostly off of Wi-fi.  People thought I had lost my mind, but now most carriers run off of wi-fi whenever possible and use big carriers’ networks to run at reduced monthly plans.

3 Most Valuable Questions

I challenged myself to go through and ask myself the 3 most valuable questions when lowering your expenses:

  • Can and am I willing to eliminate the expense?
  • Am I able and willing to do the research and make the call  to negotiate the cost of the expense?
  • Would I reduce my amount of consumption to reduce the amount of the expense?

Make more money

It’s really tempting to jump to this tip and say “Easy, I’ll just make more money”.  My text message style response is ehhhhhhh.

It’s incredibly valuable to know and understand how much you are spending.  Paying down debt in itself will increase your net worth and thus increase the speed at which you become a millionaire.  I’ll also add increasing your income isn’t easy for everyone.  

In my view it’s similar to basketball.  You might be able to jump through the roof and have the athletic ability of a natural gifted athlete.  However first you have to learn the fundamentals.  Not only learn them but repeat them.

Finding and creating income producing opportunities will increase the pace at which you reach millionaire status but my no means is this the answer alone.

Increase your Savings Rate 

This goes back to the math problem I talked about in getting out of debt quickly from above.  Your savings rate is the amount of money you are able to save as a percentage of your income.  The more you save the higher your savings rate.  Make $50,000 and you are able to save $25,000, then you have a 50% savings rate.

If you are able to increase your income while maintaining or lowering your expenses you will widen the gap and increase your savings rate.  The more you are able to save and invest the faster you will most likely become a millionaire.  I say most likely because yes the stock market goes down, although historically over long periods of time it goes up.

Most Americans are saving less than 10% of their income.  The larger your savings rate the faster and more likely you are to become a millionaire.  Now it’s certainly easier to have a large savings rate when you are making a six figure income than a minimum wage job.  

Unless of course you prescribe to keeping up with the Jones or lifestyle inflation then it doesn’t make much difference because your consumption behaviors will cancel out any large savings amounts.

I could even make the argument that the person making a lower wage has to be frugal.  They have to lower expenses just to live in America today.  When the person who has had a lower salary increases their income they are often much better off. 

Six figure income guy or gal are still spending frivolously on G wagons🚙, iPhone📱, and Sunday brunch🍳🥞🥓.  

The reason I make that argument is because I’m basically that person.

Invest large sums of money

You can invest large sums of money in a number of different ways.  You could invest in yourself with a law degree or starting your own business, that’s certainly one path to increase your income.

For myself as the guy who claims not to be the smartest person in the room I chose to invest large sums of money in two places.

Investment Real estate

Investing large sums of money in investment real estate could be saving up for a down payment or buying the real estate out right.  There are so many different options but I will make the argument that investing large sums of money in real estate is one way to watch your money grow🌱and become a millionaire.

I’ve been out of the investment real estate game for the last couple years but BiggerPockets is a great resource if you are interested in learning more.

Stock market

For the average guy or gal the stock market is hands down the best way to become a millionaire.  If you simply added large sums of money over the next 30 years, you would be well on your way to millionaire status.

If you avoided individual stocks and invested in a low fee S&P 500 index fund millionaire status would not be far behind.  

Now remember investments take a long time so if you came here to invest a few dollars here and there in Tesla, bitcoin, or whatever else the kids like today then you probably came to the wrong place.

According to Spectrem Group, the average United States millionaire is 62 years old. Just 1% of millionaires are under the age of 35, and 38% of millionaires are 65 and older.

To become a millionaire rarely happens overnight.  It takes time and consistent investing.  If you want the time to decrease then invest LARGER amounts of money.

Save and Invest automatically and Repeat

One of the reasons the journey to become a millionaire is so widely searched and pursued is it takes time and consistency.  It’s similar to searching for losing weight and how to get six pack abs. 

Anyone who tries to sell you a book, course, etc. on how to become a millionaire in a limited number of time is preying on the naïve and wishful.

The most common way to become a millionaire is to invest automatically every month and repeat for a long period of time. Yes you read that right, invest automatically and repeat.  Not sexy.  Unlikely to sell a million books but honest and true.

Investing in your 401K every month through an automatic deduction from your paycheck is a prime example.  If you maxed out your 401K every year at approximately $20,000 per year and a return of 7% it’s going to take you about 22 years.  It can be done it just takes time.

8 tips how to Become a Millionaire

  1. Don’t get in debt
  2. Get out of debt quickly
  3. Track your expenses
  4. Lower your expenses
  5. Make more money
  6. Increase your savings rate
  7. Invest large sums of money
  8. Save and invest automatically and repeat

Millionaire with arrow pointing ahead

FAQ Tips to Become a Millionaire

How can I become a millionaire in a year?

If you starting from zero it’s going to be nearly impossible to become a millionaire in a year.  Creating income and revenue streams would be my priority.  For example starting a business and creating tremendous growth.  Leveraging debt and other people’s money to obtain investment real estate property that increases in value.

I think a better question to ask is what are the first steps I should take on my financial journey to become a millionaire.

What is the easiest way to become a millionaire?

The easiest way to become a millionaire is through diligently investing in the stock market for a long period of time preferably 30 years or greater.  That I would say is the easiest repeatable action to become a  millionaire.

How do most people become millionaires?

Millionaires are created through long term investing.  Creating regular income through a 9-5 job, entrepreneur, etc.  Living a modest or frugal financial life in comparison to your income.  Buying a home and/or investment real estate that appreciates over time.  Finally consistently investing in the stock market over a long period of time.

Can everyone be a millionaire?

I’m in the minority on this but yes I believe everyone can be a millionaire here in America.  Now I won’t deny that privilege comes into play along with avoiding large financial obstacles also is a factor in the pursuit of becoming a millionaire.

But I believe that anyone who consistently invests money into the stock market over a long period of time can become a millionaire.

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