Things You'll Need:
- Paper & Pencil
- Budget / Bank Statements
- Bank Account
- A computer
-
Step 1
Find Ways to Save Money.
Becoming a millionaire is not a difficult task. But, being a little wiser with your money now will make a huge difference down the road. Those who can plan ahead will have a much easier time in their quest for one million dollars. Here's one way to get started:
How much money do you spend on little things that you don't need? For example, do you buy a $5 cup of coffee at Starbucks, when you could get your coffee at work for free? Do you buy bottled water, when you could use a refillable water bottle for free? Do you eat out everyday, when you could pack a lunch?
When most people analyze their spending habits, and cut out a couple of unnecessary expenses, they find an extra $5 - $50 per day! -
Step 2
Invest Your Savings.
Now that you've got some extra dough each month, start investing towards that million. Whether you put it into stocks, mutual funds, or some other investment vehicle, you'll be on your way to saving some real dough. The average rate of return in U.S. markets is about 11% annually. -
Step 3
Don't Think About It.
This is the key. Most of us don't have to willpower to physically take $5 and deposit it into our savings accounts each day. That's why so few retire as millionaires. However, most of us do have access to a bank that will do the transfer for us automatically.
Setting up an automatic monthly account transfer of $150 ($5 a day) from checking to an IRA is a piece of cake. Do it once, and forget about it. If the bank transfers the money out of your checking account automatically each month, usually you won't even miss it. -
Step 4
Watch your Wealth Grow!
$150 a month may not sound like much, but consider this - after 40 years those monthly deposits earning 10% interest will be worth $1,000,000! Congratulations. You've just retired a millionaire.
If you can up your monthly deposit to $300, it will only take about 34 years, $1000/monthly will take about 23 years, and so on. The more you can put away, the quicker your nest egg will grow. Becoming a millionaire is not difficult if you start early, and make it routine.
Comments
glordtiger said
on 10/23/2009 Simple but great idea.
dressyourhorse said
on 9/13/2009 Excellent. I keep telling the kids . . .
ceholmes said
on 7/6/2009 Awesome tips, I agree, saving a little bit at a time is well worth the investment in the long run! I have a high yield money market. It is one of my savings. I intentially didn't order any checks or debit cards so that I couldn't tap into my account so easily. That's another great way to keep your savings out of daily reach. 5* + recom
starlet67 said
on 6/8/2009 Very wise financial advice!
prospector said
on 6/8/2009 Great idea for explaining this to a young person. When they are young, it is beneficial to long term goals. If only I knew this 40 years ago !!!