Become a Millionaire – My Simple Plan

Are you looking for a path to a million dollar net worth that doesn’t involve crazy risk or extreme budget cutbacks? Me too. This plan was born out of a desire to stop living paycheck to paycheck and finally achieve financial independence. I decided to become a millionaire.

I felt overwhelmed at first because aiming for a million dollar net worth felt too far away. A million dollar net worth felt like a lofty goal when I was barely making enough money to cover basic living expenses. My salary at the time didn’t cover enough to put gas in my car and groceries in my fridge. 

I decided that, like anyone who sets out to achieve a large goal, I would take small consistent steps toward that goal. I started tracking the money I had saved up in my company 401(k) plan. The match is 3% which isn’t a huge amount, but it’s better than nothing. Watching these savings add up gave me the energy I needed to continue on my millionaire journey.

Here are the small steps I decided to take in order to make steady, consistent progress toward millionaire status. Hopefully these will get you started on things you can do to move further along on your own path toward becoming a millionaire. 

Steps to Become a Millionaire 

1. Start Your “Millionaire Savings Account” Today!

This might sound like a no-brainer, but saving more than you spend is the basis for any good millionaire plan. Don’t be discouraged if you’re only able to save a small amount at first. The discipline of saving will motivate you. Ideally you can just sock this money away and forget about it so you’re not tempted to spend it. However, try to check in on the balance every three months or so. You will be surprised by how fast your savings add up!

It is not easy to become a millionaire, but it is possible. Read on to discover the additional steps to increase your net worth and join the millionaire club.

2. Avoid Consumer Debt at ALL Costs

The average credit card debt in America stands at roughly $6,270 according to the Federal Reserve’s Survey of Consumer Finances.

And if you’re in credit card debt, you are not alone. Over 47% of American consumers carry credit card debt. When you demolish your credit card debt, you take a huge step toward becoming a millionaire. 

When I got out of consumer debt, I had to go cold turkey and stop spending on credit cards all together. It took me two and a half years to knock out my credit card balance. Those two years felt like an eternity, but once I reached my goal, I felt amazing. I felt a sense of control and power over my money that spilled over into other areas of my life. I felt like I could accomplish anything, including becoming a millionaire.  Here’s a video I made where I share my story.

Some financial gurus advise avoiding credit cards altogether. You might want to keep using credit cards “for the points”. However, if you are not able to pay off your balance every month, then you need a new plan. The most important thing is that you come up with a millionaire plan that works for you. 

3. Keep Costs Low and Avoid Unnecessary Spending

The less you spend, the more you can save and invest. The key to increasing your savings is keeping your spending low. Avoid the temptation to give in to lifestyle creep. Lifestyle creep can do just that: creep up on you. Gradually you succumb to the temptation to buy a bigger car, a bigger house, and add more things into your life. Millionaires know the difference between wants and needs and are able to  prioritize the true actions and savings that will get them to their goals faster. 

4. Save at least 15% of your income

This is the minimum amount you should aim to save. So this is the starting point and anything beyond this is better. In his book, The Simple Path to Wealth, JL Collins advises his readers to invest at least 50% of every dollar they earn. This is an even better savings rate. People who subscribe to the “Financial Independence Retire Early” movement advocate for a 60% savings rate or higher. The more you can save, the faster you can hit millionaire status. Your savings rate should depend on the priorities you have in front of you. 

Saving forms the cornerstone of your millionaire plan. Don’t neglect this part of the plan and get started early. The sooner you start saving money – no matter how small the amount – the faster you’ll start moving toward your goal.

5. Make More Money (Yes, this is easier said than done…)

The more money you make, the more money you save. Again, this is easier said than done. If you’re aiming to become a millionaire, the more money you save, the faster you get there. If your salary isn’t allowing you to save as fast as you’d like, then it might be a good option to consider. 

Increasing income is an important part of this millionaire plan. I talk about the first time I succeeded in increasing my income in this blog post here.

You can set out to earn more money with the specific purpose to invest and grow your net worth. In this case, you’re not working just to feed the consumer treadmill, you’re working with the specific goal of getting yourself off the consumer treadmill. If you put in a few hours each week, even at minimum wage, you’ll soon find yourself with more capital to throw into your next egg. 

6. Educate Yourself!

Learn as much as you can about investments and investing. I’ve learned my own investment profile at the moment. I prefer a hands off approach and a simple index fund within tax advantaged savings accounts suits my needs.  

Financial education wasn’t table talk when I was growing up or when I was in college. It was only when I realized that I wanted to change my financial situation that I started taking an interest in financial matters. This is something that grew on me slowly. 

Learning more about investing and wealth creation will bring you closer to millionaire status. The more you learn, the more robust your millionaire plan will become. I check my investment accounts and learn more about the market with the intent to bring myself further toward millionaire status.  

The Bottom Line: 

Building a million dollar net worth is a huge goal, but like any accomplishment, it’s possible if you break it down into smaller parts. 

My Plan – In Summary: 

Continue to stay debt free

Increase my savings rate to 15% in index funds (401(k) and IRA) 

Increase my income through building my businesses