most people believe it's nearly impossible to retire as a millionaire but that's simply not true becoming a millionaire is easier than one might think and it's doable even without a high salary regardless of common misconceptions it doesn't have to do with your family's money extreme luck where if you obtained a college degree or even if you earn a high income take a look at some things that anyone can do to become wealthy and stay until the end to hear how you can really accelerate that process my name is chris and i help teach people about
money personal finance and investing if you're interested in improving your financial future make sure to subscribe to the channel and hit the like button if this video is helpful the fact is becoming a millionaire doesn't mean you have to go to work to earn the money and personally save one million dollars that would be extremely difficult on an average income thankfully the majority of your wealth will be the result of interest earned from your investments for example if you were to start with nothing and invest six thousand dollars per year into the s p 500
earning a 10 rate of return in 30 years you'd have 1 million 85 000 you don't need to personally contribute that entire amount you would have only put in a fraction of that total your contributions of five hundred dollars per month by themselves only add up to 180 000 this means that the other 905 000 was interest earned from being invested in stock market saving 180 thousand dollars over a 30-year period sure sounds more reasonable and achievable now that you have a clear idea of what it takes to become a millionaire let's look at some
specific steps you can take to reach that goal knowing exactly what you're trying to accomplish will help you lay out a plan to get there when do you want to become a millionaire and how much money do you need to save to stay on that timeline do you plan on having the majority of your money in retirement accounts that have certain requirements or will a large percentage be tied up in real estate why do you want to become a millionaire it's important to understand what being a millionaire looks like and have realistic expectations just because
someone is a millionaire doesn't mean they have a never-ending income one of the keys to be able to consistently invest is by keeping your expenses relatively low and that starts with being debt-free or at least avoiding bad debt some people prefer to have good debt which is typically a loan on an appreciating asset if your mortgage company is only charging three percent interest and you can safely earn ten percent by investing it it might be worth it to use that loan additionally if the rate of inflation exceeds 3 percent you're basically borrowing money free of
charge more importantly avoid bad debt on consumer goods that are guaranteed to go down in value and typically come with high interest rates it's a bad idea to borrow money for things like clothes jewelry vacations and other things that have basically no underlying value by keeping debts low it ensures you're intentional with your money and you only buy things that you can afford people waste so much money on unnecessary expenses or things that just aren't important to them everyone will spend money on things that aren't necessary but consider these to be things that aren't important
to you for example most people don't realize how much money they could be saving by shopping their insurance around prices for car insurance vary drastically and it's common for one company to charge twice as much as another for the exact same coverage subscriptions could be eating away your paycheck and you might not even be taking advantage of them are you still using that gym membership you signed up for in january or are you just being charged automatically what about that streaming music subscription you had a free trial for and are now paying for every month
consider how much you're eating at restaurants and what effect those meals will have on you as well as your wallet the idea isn't to stop spending money on every enjoyable thing in life it's to cut down on the expenses that you don't really care about and that are costing you your future increasing your income will allow you to save more money allowing you to become a millionaire even sooner you don't need a six-figure income to become wealthy but if you're barely getting by it can be hard to consistently save and invest enough income to get
there it's not necessary to build a successful startup or receive an advanced education to get a bump in pay there are a few easy ways to increase your income start by asking for a raise from your current employer many companies hardly ever offer to increase employees pay if they seem content often paying the new hires more than the loyal seasoned help be sensible and firm when requesting a raise and be prepared to leave the position if the employer is being unreasonable changing companies is another way to receive a boosted income there's a shortage of employees
in the workforce and many companies are willing to entice new hires with an increase in pay taking advantage of these opportunities is a great way to ensure you're receiving a fair pay rate if you're self-employed what can you do to provide more value so you can earn more money providing a better product increasing your professionalism and improving your skill set are all ways to earn more money furthermore starting a side job or business is an excellent way to branch out into other income generating activities who knows starting a business might lead you to eventually quit
your day job and focus on that full time according to the 2019 survey of consumer finances the average homeowner's household has a net worth of about 255 000 compared to just over six thousand dollars for a renter this shows a strong correlation between household wealth and home ownership does this mean everyone should go buy a house especially in a hot housing market no but over the long term house prices tend to appreciate when you can borrow money on an appreciating asset at or neither rate of inflation and have the same monthly obligations as you would
renting a place it presents an excellent opportunity if renting costs eighteen hundred dollars per month and you can purchase a home for that same payment when you factor in utilities taxes insurance and so on that can provide substantial progress towards your net worth there are many variables to consider when deciding to rent or purchase housing is the single largest expense of the average household so it's not a decision to take lightly so many people underestimate the importance of selecting the investments that will help you reach your goals this includes buying investments that provide the right
amount of risk and reward for your timeline being too conservative could cost you hundreds of thousands or millions of dollars in potential interest on the other hand taking on too much risk and throwing everything in crypto could cause you to lose everything overnight elaborating on the original example a 10 return for 30 years would provide 1 million 85 000 if you had invested the same amount of money every month for 30 years and only received an 8 annual return you'd be left with just 734 000 additionally keep investment fees low don't waste money on funds
that have high expense ratios those fees have a tendency to eat away your portfolio and they are charged every year regardless of whether or not your portfolio makes money to become a millionaire you need to let time and compound interest work in your favor so the majority of your wealth was created through investing the best way to do this is by sticking to the plan and keeping your goals in mind it's not something that most people will achieve overnight but rather over the course of decades make these behaviors habits like finding ways to increase your
income keeping debt low paying attention to your expenses and checking on your investments regularly deviating from the plan could cost you years of financial progress these are the behaviors of everyday millionaires average people that were able to build wealth once you reach millionaire status you'll keep doing those things allowing you to become richer and richer while enjoying your accomplishments
