There are an estimated 7.4 million American millionaires. You are probably wondering how to become a millionaire yourself. The process is quite simple, but it takes work. Otherwise, everyone would be a millionaire. Anyone can become a millionaire, given enough time. Here are some strategies to help you become a millionaire faster.
How Hard Is It To Become A Millionaire?
There are an estimated 7.4 million millionaires in the United States now. While there is no estimate of how many people will eventually become millionaires, given enough time and smart financial guidance, anyone can build a million-dollar net worth. The bottom line is that it is not that hard to become a millionaire.
You don’t need to work on Wall Street, become an influencer or be born a Kardashian or star athlete to become a millionaire. According to the book “Millionaire Next Door,” the average millionaire makes a relatively average income, drives an average car, and lives in an average neighborhood. It’s more about how you handle your money than how much you make, your profession and how much you earn. Granted, if you sign a multi-million-dollar contract to play in the NFL or NBA at 22, you are likelier to become a millionaire than if you are working for minimum wage.
Steps To Becoming A Millionaire
You will need to invest in something to become a millionaire; this could be the stock market, real estate or your own business. If you work for a company with stock options, this could even mean investing in your career. The hardest part is getting started.
Depending on the path you choose to become a millionaire, you may or may not need more resources to get started. Anyone can start investing with a few dollars per month, whereas buying real estate will take more upfront cash. Most people who become millionaires combine a few strategies between investing in stocks, owning real estate and building their careers. While earning a high income makes it easier to become a millionaire, you won’t build real wealth if you constantly live paycheck to paycheck.
1. Invest In Your 401(k) At Work
One of the most common ways to become a millionaire is to contribute to your 401(k) at work. At Fidelity alone, there were over 485,000 401(k) millionaires at the end of the first quarter of 2024. That number surely jumps if you include all of a person’s retirement accounts.
This strategy to become a millionaire probably takes the least effort. You fill in a form, and money is automatically taken out of each paycheck. You will even get a tax deduction for your 401(k) contributions. You may even get additional matching or profit-sharing contributions from your employer.
In 2024, you can contribute up to $23.000 to your 401(k). That number could jump to $69,000 if you are self-employed or get contributions from your employer. Add $7,500 to these 401(k) contribution limits if you are 50 or older.
While I don’t recommend never looking at your 401(k) after you set it up, as long as you have your job and don’t make any changes after setting up your automatic contributions, money should keep going into your account.
2. Buy Rental Properties
Many people love investing in rental properties. Over time, many people have built mini-empires based on their real estate portfolios. The buying rental property strategy helps you become a millionaire by having other people pay your mortgages on real estate.
Down payment requirements can be a significant barrier to entry for owning rental properties. Likewise, being a landlord can be stressful and time-consuming. On the bright side, owning rental real estate also has some tax advantages. To become a real estate millionaire, you will likely need time and hard work to accumulate rental units.
3. Buy A Home
Owning a home can be a great way to become a millionaire. Say you buy a million-dollar home; you need a place to live, right? If you make monthly payments for 30 years (and don’t refinance), you will own the home outright and be a millionaire. If the house’s value has appreciated, you will be worth more than a million dollars.
While buying a home does take effort, building up home equity does not really take any time out of your busy schedule. To utilize this strategy to become a millionaire, you must qualify for a mortgage and come up with a down payment.
4. Start Your Own Business
A large percentage of millionaires are business owners. Starting a business can also be a great way to become a millionaire. Don’t be fooled; starting a business takes time and effort. This could be anything from a side hustle to running your own practice. Why earn money for someone else when you can earn it for yourself?
5. Earn Stock Options At Work
Stock options are not available to all workers, but for some, they have been a fantastic way to become millionaires and multi-millionaires. Think of people working at tech companies or other startups who essentially became rich overnight.
Of course, they likely had to put in years of work to earn their stock options and more years of work for those options to vest and grow in value. They often had to wait for some other liquidity event for there to be value in these stock options.
Bottom Line
So, you want to become a millionaire. Start investing today, even if you don’t know how to make that a reality. The more time you have, the easier it will be to reach financial freedom. Even just $1 per day could make you a millionaire in 60 years.
Read the full article here
