Have you ever thought about how to become a millionaire? Whether you are interested in investing, building your own business, or a combination of both, you will be happy to know that obtaining millionaire status isn’t out of reach. In fact, according to a new 2017 Credit Suisse annual report on the state of global wealth, there are over 1.1. million new millionaires just this year in the United States. This figure brings the overall total of American millionaires to 15, 356,000, or one in every 20 people in U.S.
Knowing these recent figures, you may be wondering why the surge in new millionaires in America this year. For most of the people in that category, the stock market rise was largely responsible. So how can you save to become a millionaire through investing and other savings options? Here are 6 tips for becoming a millionaire or at least getting pretty close:
- Create a written financial plan. Every financial planner will tell you that one thing all successful investors have in common is the creation of a financial plan. Writing a plan down moves you from thoughts, hopes, and ideas to action.
Two major elements of your plan will involve how much money you earn/currently have, and how much you spend. The way in which you utilize these resources (no matter how much or how little you have), will be one of the greatest factors in getting closer to millionaire status.
- Find ways to increase your income. With many students graduating with massive student debt, plus the ups and downs of our economy, it isn’t easy to just save your way to a million dollars in the bank. Action must be taken regarding increasing your income each month. This will take some time and may involve creating a side job in addition to your full-time employment, investing in high ROI businesses, and working with a financial planner regarding other investment strategies.
- Take advantage of compounding interest – Another tip for becoming a millionaire involves allowing your money time to grow thanks to compounding interest. Take advantage of any 401(k) or 403(b) offered by your employer, where your money will compound fast and any money you contribute is tax-deferred. Also, speak to a wealth management professional about IRAs, either Traditional or Roth.
- Build streams of income. This tips goes inline with the second tip above. While you want to be bringing in more money overall each money, you also want to focus on building multiple streams of income. This is also something all millionaires have in common. In fact, finance author Thomas Corley found that two-thirds of all self-made millionaires had three income streams (and others had four and even five income streams!).
- Say no to credit and overspending. Did you know that millionaires are often the most frugal people in the world? In most cases, they live well below their means and don’t overspend on fancy cars and oversized homes. In addition, they are typically not fans of using credit. If overspending is an issue for you, work with a financial planner to help you curb spending, create a budget, and shift your focus to building your nest egg rather than splurging.
- Increase your knowledge – Another common fact regarding millionaires is that they spend time each day to increase their knowledge base whether it is listening to a podcast or audio book, reading, taking a seminar, getting certified in a particular area, or becoming a lifelong student. This helps you branch out regarding your knowledge base and helps you become well-rounded in areas that can potentially help you build new income streams.
(Credit: Dave Ramsey)
Are you ready to save to become a millionaire? Let a financial planner help you create your financial plan and strategy. Though it will take time and some hard work, becoming a millionaire is an achievable goal! To learn more, reach out to Matt Logan at www.Mattloganinc.com
Matt Logan Inc is an independent firm with Securities offered through Summit Brokerage Services, Inc., Member FINRA, SIPC. Advisory services offered through Summit Financial Group Inc., a Registered Investment Advisor. Summit Brokerage Services, Inc., its affiliates and Matt Logan Inc. do not give tax or legal advice. You should consult an experienced professional regarding the tax consequences of a specific transaction. These are the views of Matt Logan Inc, and not necessarily those of Summit Brokerage Services, Inc. and any of its affiliates and should not be construed as investment advice.