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How to Become A Millionaire – 5 Steps to Becoming Wealthy

Want to know how to become a millionaire? Follow this 5 step process: Earn money, spend less than you earn, save, invest, and repeat. Then just add time.
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My wife reads my site and often sends me links to stories and other ideas. One day she sent me a link to an article called 8 Ways to Make a Million bucks.

The article chronicles eight different millionaires and shares a brief story about how each of them reached millionaire status.

As you would expect, the stories are as diverse as the people they highlight. Several people started their own businesses.

One man made his millions in real estate, a firefighter cashed in his pension, and another made his millions working an $11 an hour job (and making wise money decisions along the way).

I sent my wife a quick e-mail thanking her for the link, and in closing, I wrote, “I wonder what our millionaire story is going to be?”

Her response: “You think we will have one?”

Me: “Of course, it’s only a matter of time.”

And I believe that. I don’t know what it will be, and it may not be glamorous, but we will be millionaires. It’s only a matter of time – and a few other factors.

Table of Contents
  1. How Easy is it to Become a Millionaire?
    1. Where are these millionaires?
  2. How Do Millionaires Make Their Money?
  3. A Step by Step Guide to Making a Million Dollars
    1. You Need a Source of Income
    2. Earn More Than You Spend
    3. Save Some of Your Income
    4. Make Regular Investments
    5. Monitor and Repeat the Process
  4. The Millionaire Mindset – 5 Traits All Millionaires Share
    1. 1. Frugality
    2. 2. Willing to Make Wise Investments
    3. 3. Focus and Discipline
    4. 4. Optimism
    5. 5. Willing to Get Their Hands Dirty
  5. The Fastest Way to Become a Millionaire
  6. How to Become a Millionaire if You Have No Money
  7. Books on How to Become a Millionaire
  8. Is Becoming Wealthy Really that Simple?

How Easy is it to Become a Millionaire?

How easy it is to become a millionaire depends on how hard you’re willing to work for it. The good news is you’ll be in a pretty big crowd when you get there.

Here’s why.

In 2022, the Global Wealth Report says that the total number of millionaires in the United States is 20.27 million. The United States added 2,251,000 new millionaires from 2019 to 2020 alone, putting it at the top of the list of countries with the most millionaires.

That means that just over 8% of Americans are millionaires.

It gets even more interesting when you look at the number of multi-millionaires. It’s estimated that 1,456,336 households have a net worth of at least $10 million.

Taking it to the next level, 89,510 people in the United States have net assets of at least $50 million.

And finally, according to a census report in 2020, there are 788 billionaires in the United States with a combined net worth of $3.431 trillion.

It does take a while to get to seven-figure wealth. The average age of US millionaires is 62 years old. Only 1% are below 35.

Where are these millionaires?

According to a 2020 report, there are 323,443 millionaire households in New Jersey due to its proximity to New York City.

Globally, about 52 million people own one million dollars or more worldwide. The US accounts for 39% of the total, while China is in second place with 11%.

How Do Millionaires Make Their Money?

Here’s an interesting stat.

About 20% of Americans inherit their riches.

The rest are self-made, first-generation millionaires.

The finance and investment industry has the most millionaires, with 14% of the US total. Industrial conglomerates are second at 9.1%, followed closely by millionaires in the business and customer services industry at 9%.

A Step by Step Guide to Making a Million Dollars

Becoming a millionaire is not extremely difficult. It takes money, time, discipline, and a little luck. All you need to do is follow these five steps:

You Need a Source of Income

Unless you are born into riches, inherit wealth, or strike it rich in the lottery, you need to earn money. You don’t need to make a lot of money to become wealthy; it’s what you do with that money matters.

If you want to increase your odds of becoming a millionaire, consider some methods of making extra money. Adding a few ideas to your lifestyle can grow your wealth.

Check out a quick way to make an extra $250 free money just by opening up a new account with Chase Checking. You have to start somewhere!

Not only do you need a source of income, but having a second income is also a great idea. I don’t mean you have to have an additional part-time job, but find a way to make a couple of extra bucks on the weekends or a few nights during the week.

This could be anything from freelance work to selling homemade goods on Etsy. Making an extra hundred bucks every month could hugely impact your millionaire journey.

It may not seem like a lot, but it can add yearly.

How are we doing? My wife and I earn a decent living, but along the way, we made several lifestyle choices that reduced our income, including the decision for my wife to be a stay-at-home mom. I firmly believe we will still become millionaires – even in a one-income household – and I hold firm in this belief because we follow the rest of the steps in this article.

Earn More Than You Spend

My wife, and I have done fairly well with our finances, primarily because we spend less than we earn. Another, and perhaps better, way to look at this is to earn more than you spend. I am not implying you should deprive yourself of the things you enjoy or live a monk’s lifestyle.

I believe you should focus on buying value in the things you enjoy and making big wins to reduce your expenses on non-essentials and things that don’t bring you joy. For example, in our family, eating out is a treat. We save a lot of money by not dining very often.

But, when we dine out, we focus our efforts on nights when kids eat free. Not only do we save money this way, but if my son decides tonight’s dinner choice is not high on his list of priorities, we didn’t waste money on a meal.

This removes any wasted food’s financial tension and allows my wife and me to enjoy the meal more.

Above all else, living within your means is the key to financial success. If you combine these principles, earning more and spending less, you will be ahead of 95% of the world.

If you want to supercharge your millionaire journey, it’s important that you aren’t spending every dime that you earn.

You probably can’t demand a raise from your boss, but there are a few simple ways that you can essentially give yourself a raise. Cutting out some of your major expenses, like canceling your cable or going out to eat less, can save you hundreds of dollars yearly.

If you save $200 every month, you’ll find $2,400 at the end of the year.

Save Some of Your Income

There is a simple fact that many people miss: you will never grow wealthy if you spend everything you earn. Regardless of how much money you make, you need to put some aside in savings. A cash cushion is nice because it helps you prepare for unexpected expenses and helps you avoid debt.

But there is another reason that saving money is essential – because of taxes and other factors, money saved is worth more than money earned!

Another advantage of having some cash savings is using the money for investments or other large purchases when you come across a good deal. That could be an investment, property, or a good deal that saves you thousands of dollars on a significant purchase.

Take advantage of these principles and save money whenever possible.

Make Regular Investments

Investing is the best way to grow your wealth. Compound interest has been called the strongest force in the universe, and you want that force working for you!

There are many ways to invest, and you can be successful if you make wise investment decisions and let time and compound interest work for you.

Investing in tax-advantaged retirement accounts such as a 401k or Roth IRA can you grow your wealth more quickly since you won’t have the drag of taxes pulling down your investment portfolio.

You can also use retirement accounts to shape your taxes now and in the future, giving you a powerful tool to help grow your wealth.

Investing can seem intimidating if you haven’t started yet. But it doesn’t have to be.

Check out these beginner investment strategies to get you on the right path. You can also start by opening a 401k plan with your employer or a Roth IRA.

Monitor and Repeat the Process

The path to becoming a millionaire becomes easier once you start the process. It all starts at the beginning with small lifestyle changes.

For example, making small lifestyle changes to reduce your fixed monthly expenses can go a long way toward helping you spend less than you earn. This, in turn, makes it easier to save a little money each month.

Once you have a little cash saved, minor emergencies are no longer emergencies, and you are no longer treading water. This makes it easier to invest.

There are other things you can do to make the process easier. You can, for example, set up an automatic savings or investment program, so you don’t have to think about it.

Out of sight, out of mind is an excellent motto for saving.

But you also need to know where your money is going. I recommend using money tracking software to show you where your money is going.

Some excellent free online money management tools make it easy to see your income, expenses, and spending patterns in one place.

My favorite is a free money management tool, Personal Capital, which helps you track income, spending, and investments.

Once you know your patterns, you can plan your spending and invest around them to help you reach your goals.

The Millionaire Mindset – 5 Traits All Millionaires Share

Many of us are interested in becoming millionaires. However, that goal sometimes seems rather far away.

You don’t have to be born rich, or inherit a fortune, to become a millionaire. You can work your way into your millions if you have the right stuff.

But it helps to know what traits often make a millionaire. Here are five traits that many millionaires have — and that you can develop:

1. Frugality

Not all millionaires are frugal. However, many of those who are self-made millionaires practice some form of frugality.

Even billionaires like Warren Buffett have some frugal habits. Frugality is looking for ways to get the best value for your money.

It doesn’t always mean getting the cheapest thing; it’s more about the best value. It also means you don’t waste money on things you don’t need or want.

Practicing frugality can help you keep more of your money for the future.

2. Willing to Make Wise Investments

Most millionaires know that making money takes money. Millionaires understand the power of compound interest. They study how to make wise investments.

Whether it’s taking good care of themselves so that they aren’t spending money on health care later, investing in a good education (not necessarily college, though), starting a business, or finding solid stocks to buy, millionaires study out what is likely to bring them a return.

They make solid investments after considering the options.

3. Focus and Discipline

If you want to be a millionaire, it helps to know what you want and have the discipline to go after it. When you set a goal, you focus on it and pursue it.

That means that you don’t get sidetracked by less important matters. If you know you need to set $1,000 a month aside to meet your millionaire goal within an allotted timeframe, you focus on that.

You cut expenses or, better yet, look for ways to increase your income to meet your goal. Sometimes it’s not fun, but millionaires usually stick with it.

4. Optimism

When speaking with millionaires — especially self-made ones—you might find that there is an element of optimism and joie de vivre. Many millionaires know that if things go wrong, it is possible to find the bright side, learn from mistakes, and move on.

Additionally, many millionaires know how to enjoy life as well. Many successful and happy millionaires understand that there is more to life than just amassing wealth; sometimes, you must spend time with your family and friends, eat good food and relax.

However, the ability to find a silver lining, and have the persistence to try again, is one of the defining traits of a millionaire.

5. Willing to Get Their Hands Dirty

Sometimes, it takes a little elbow grease to get there. Or, if you are running a business, it might take some late nights.

Millionaires are willing to work hard and do things for themselves when they need to. Millionaires are also willing to do what it takes, even if it means taking on an unpleasant job.

A millionaire also knows that this includes taking responsibility for their financial destiny, refusing to blame others for misfortunes, and finding ways to ensure income streams are diverse.

The Fastest Way to Become a Millionaire

I’ve already given you a high-level framework of action items you can implement to make a million dollars. Here are some other things you can do to supplement those steps:

Adjust your mindset. Play the long game. Getting rich overnight rarely happens, so don’t think you’re going to strike the mother lode in six months or even a year. That rarely happens. Prep yourself for the long haul instead.

Practice compounding. I mentioned this above, but it bears repeating. Take small victories and stack them one on top of another. When you step back after some time, you’ll be blown away at how far you’ve come, even though your day-to-day accomplishments may not feel like much.

Seek mentors.  Find successful people who are open to the idea of helping you and then build a relationship with them. There is no substitute for learning how to make a million dollars than from someone who has already done it.

Become an expert.  When you are better at something than everyone else, you will be paid handsomely for your high level of expertise.

Build your network. Nobody gets rich in a vacuum. Build a team of people you trust who can add value to your millionaire goal and spend quality time with them.

Learn to say NO.  This may be more critical than any other piece of advice. You only have so many hours in a day, a week, a month, and a year.

Don’t waste them! Only spend time on projects and with people who can elevate you. Be ruthless and eliminate anything that does not get you closer to this purpose.

Put in the hours. There are no shortcuts. Put in the time and effort. Otherwise, you’re just playing at trying to become a millionaire.

Avoid debt.  If you want to be the man (or woman), you can be the one paying the man (or the woman. The key is to build ways that result in people paying you.

Be an owner.  Working for yourself has untold benefits, not the least of which is a limitless financial upside. Do not let someone else set your worth by working for them.

Invest in yourself – Be a sponge. Absorb every piece of knowledge that puts you closer to your millionaire goal. The more you know, the less you can be taken advantage of, and the better positioned you’ll be to capitalize on opportunities that come your way.

Work on your leadership skills.  Learning how to get others to produce for you is often a valuable and learned skill. Invest in figuring out how you can be a highly effective leader so that you can motivate others to make money for you!

How to Become a Millionaire if You Have No Money

You’d be surprised if you did a little digging and found out how many highly successful and wealthy people started with nothing.

Never let a lack of money be a barrier for you.

Instead, replace that lack of money with an extreme and unshakable desire to make a million dollars. Then, start as small as you need to start, building your wealth one dollar at a time if needed.

I’ve mentioned compounding, which you need to focus on if you haven’t got any resources starting out.

The other thing you need to do is start finding ways to make more money. Invest in your education.

Get a degree that can lead to a higher-paying job. Get a second or even a third job and set aside those funds for your wealth-building efforts.

It’s not a crime to be poor and want to be wealthy. But it is a crime to think that you’ll never be rich if you aren’t wealthy now.

Books on How to Become a Millionaire

One of the best investments you can make to become a millionaire is to read how others have done it. People who are already wealthy understand the power of knowledge which is why they continue to invest in learning as much as possible.

For example, Bill Gates reads a new book every week. Mark Cuban estimates he spends more than 10% of his day reading.

And on a larger scale, 88% of people with annual incomes of $160,000 or more spend at least 30 minutes a day reading.

You’ve probably got dozens of reasons why you don’t have time to read, but until you understand that you can tap into existing wealth strategies, you will be fighting a lonely battle.

The question then becomes what to read first. I suggest diving into the best of the best, the all-time classics that keep appearing on list after list, and for good reasons.

Here are 11 of the best books that have been around for a while. All of them are widely available and easy to find.

Read these, and you’ll be well on your way to building your millionaire mindset. From that, you can branch off into other titles depending on where you want to go and what you want to learn.

  1. Think and Grow Rich by Napoleon Hill
  2. Rich Dad, Poor Dad by Robert Kiyosaki
  3. The Millionaire Next Door by Thomas J. Stanley and William D. Danko
  4. The Intelligent Investor by Benjamin Graham
  5. Your Money or Your Life by Vicki Robin
  6. The Richest Man in Babylon by George S. Clason
  7. The 7 Habits of Highly Effective People by Steven R. Covey
  8. The Science of Getting Rich by Wallace D. Wattles
  9. How To Win Friends and Influence People by Dale Carnegie
  10. “The Millionaire Fastlane” by M.J. DeMarco
  11. “How to Be Rich” by J. Paul Getty

Is Becoming Wealthy Really that Simple?

Earn money, spend less than you earn, save, invest, and repeat the process. Embrace the Millionaire Mindset.

After that, it’s just a matter of time. Even if it takes years or decades, the process is that simple.

Of course, it may not seem as easy as I laid it out here, but it is. Remember, this is not an overnight get-rich-quick scheme. It takes time, planning, and a little luck along the way.

Get started. If you want to become a millionaire, you need to decide to do it and get started. If you cannot save money now because of debt or other financial obligations, you should work on those issues first.

An excellent place to start is Dave Ramsey’s Baby Steps. That is a tried and true method for setting up an emergency fund, paying debt, and beginning your investments.

Once you have that started, you can begin your million-dollar journey.

What will your millionaire story be?

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About Ryan Guina

Ryan Guina is The Military Wallet's founder. He is a writer, small business owner, and entrepreneur. He served over six years on active duty in the USAF and is a current member of the Illinois Air National Guard.

Ryan started The Military Wallet in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about personal finance and investing at Cash Money Life.

Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free Personal Capital account here.

Featured In: Ryan's writing has been featured in the following publications: Forbes, Military.com, US News & World Report, Yahoo Finance, Reserve & National Guard Magazine (print and online editions), Military Influencer Magazine, Cash Money Life, The Military Guide, USAA, Go Banking Rates, and many other publications.

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