there are subtle signs that signal to me that you're on track for multi-millionaire status and in today's video we're going to discuss what these signs are how you can figure out if they apply to you currently and if they don't we'll discuss some strategies on how you can get there the first sign that shows to me that you're on track to becoming a multi-millionaire is that you are prioritizing a high savings rate sorry that means not paying extra for guacamole at Chipotle as tempting as it might sound take a look at this chart from the
four-pillar freedom blog you can see that at the bottom you have your current ages 15 20 25 30 35 Etc then in the mey portion of this chart you can see what age you'll be a millionaire at if you save the amounts on the left column per year so if you're someone who's the age of 30 and you save 10K per year you'll be a millionaire at the age of 60 and if you save 20K per year you can be a millionaire at age 52 and so on and this assumes you start with $0 invested
and get a 7% return in the market the more you're able to save the faster that you can get to millionaire status and then work your way to multi-millionaire status itself some interesting benchmarks include the fact that if you are able to save $10,000 per year or about $833 per month you will hit millionaire from zero in 30 years regardless of your age if you save 20K per year no matter where you start you will become a millionaire in 22 years and if you save 40K per year you become a millionaire in 15 years starting
from scratch so multi-millionaires are prioritizing their savings rate because the concept of compound interest really is ingrained in their heads by by getting to a place where your money starts producing more money for you that's when you can get on track for millionaire as well as multi-millionaire status now if you're watching this and you're thinking to yourself man I can barely save $2,000 a year much less 10,000 do not lose hope instead I think you should be proud that you were saving any money at all and instead you should turn your sites and your gold
to saving as much as you can in order to hit the $100,000 Milestone as quickly as possible that's because when you hit 100K you are in general more than one tenth of the way to $1 million it's actually disp proportionate progress in a good way I know that doesn't sound logical but let me explain looking at this graph and this is saving $10,000 per year you can see that your first 100K might take you 25.5% of the total time to $1 million after you hit 100K the remaining 900k takes about 74.5% of the time so
wealth building is always slower in the beginning but it accelerates later because your money starts to make money for you now before we get into the second sign today I just want to remind you guys if you are enjoying this video so far make sure you're subscribed doing so takes less than a second and it really supports the channel so thank you the second sign that shows me you're on track to multi-millionaire status is that you are always on the lookout for opportunities of an extra income stream or you might already have multiple income streams
according to the IRS the average millionaire has several income streams and if we're able to create multiple sources of income we'll have a diversified mix of how we're able to make money so most people will have earned income that's just your primary job you work for an employer you might work for yourself but either way it's the primary way way you generate income and it generally comes from Trading your time for it or your expertise for it but multi-millionaires don't rely just on earned income they might have a form of income such as number two
investment income this is the money you may earn from holding certain assets that pay dividends like stocks bonds or index funds and this is entirely passive because as long as you hold say a dividend paying stock like JP Morgan you'll get paid around a 2% dividend per year and you also benefit from some of the capital appreciation from the stock itself now this type of income is pretty easy as in you just have to buy it in your brokerage account or retirement account and then this type of income is now activated in this way I
think this income stream is more of a byproduct of just holding quality assets a third income Source many millionaires will have is that they own properties that produce rental income even if you don't have a property just for the purpose of renting you could rent out a room in your home an attached dwelling unit or Adu for extra cash or you could rent out perhaps your car you could argue that many multi-millionaires probably started out with earned income they prioritized their savings rate and then eventually they were able to buy rental properties that now pay
them money on a regular basis in this way I think a typical multi-millionaire mindset is thinking about how can I take my money to buy incom producing assets if you're able to have this type of mindset when it comes some money you'll start to think about different ways to buy assets that eventually make you more money later on another income Source number four could be interest income so for example this could be the income you get for keeping your money in a high yield savings account or any other type of interest bearing account accounts right
now a lot of the high yield savings accounts out there are paying about 4.5 to 5% at the time of this recording that means on a $10,000 of savings over the course of a year that's upwards of $500 per year for just saving your cash in a high guil savings account the fifth income source that millionaires commonly have are business profits so many millionaires usually have a primary job yes but then they will work on a side business that could grow into a full-fledged business on its own eventually once that business gets to a point
where it could potentially replace their Prim primary income then they focus on that and often times with a business there's much more upside if you own it directly having equity in a business that could have a huge seven or eight figure exit eventually is going to be worth more than working for somebody else in many cases now that's actually a lot easier send than done I'm sure it's actually very difficult to start a business number one and then number two try to sell it for seven or eight figures but you get the idea now there's
somewhat of a bonus sign today that shows me you're on track to being a multi-millionaire and that is just simply that if you increasing your income on a yearly basis I I think that is a really good marker for eventual wealth most multi-millionaires will create more of a gap between their income and their expenses and by widening that gap between their income and how much they spend they're able to invest more and more of their money further snowballing their wealth so that's something to keep in mind even if you aren't able to create multiple sources
of income how can you advance in your own career to start making more money while not upgrading your lifestyle because that's sign number three that you're on track to being a multi-millionaire today which is not upgrading your lifestyle and really not trying to pay any attention to your peers I don't mean don't pay attention to your friends but when I say don't pay attention to your peers don't really let their lifestyle choices affect yours whenever you start making extra money it's tempting to spend that extra money on the things you weren't able to afford before
maybe it's a higher car payment it could be new electronics or toys or just even new clothing and in personal finance you may be tempted to draw comparisons of your financial life versus friends of yours or colleagues or just other people your age especially these days because we can see it on social media 24/7 so you might feel this temptation to spend more money as you earn more but I promise you guys if you can resist that Temptation you're going to be a lot better off everyone's on their own little journey and your set of
goals definitely could differ from your friends or your colleagues goals so as an example some people love spending everything that they make some people are Mega Savers and then there are some people that are just in between so when it comes to spending money we all have different values when it comes to that I mentioned this in a previous video but what we really want to avoid is becoming the 30k millionaire this is a phrase I learned about uh in Texas and a 30k millionaire according to Urban Dictionary is the following individuals who make $30,000
a year but act like they make millions check out this 30k millionaire driving the low-end BMW who still lives at home with his parents it could be someone who goes to the club and pays to get a VIP table and then they can't buy any of the drinks because they spent all their money on a table what a 30k millionaire so that's kind of funny because people that look like they have money actually don't have money and the people that don't look Rich are usually the ones that do one of the lessons of the book
The Millionaire Next Door is when they are talking about lawyers and doctors it states that these professions usually earn above average incomes but also they want to live in the same neighborhoods that their colleagues do their colleagues might drive Porsches and Ferraris so when a doctor or lawyer moves to that neighborhood they may feel that temptation to buy one as well they often struggle to pay off student debt and car loans and usually have huge mortgages the authors of this book actually found through studying many millionaires that the ones who accumulated their wealth the fastest
had spending habits that did not necessarily rise when their incomes Rose so instead of being the 30k millionaire like in the Urban Dictionary example I want you guys to be million Millionaires and focus on wealth accumulation over vanity all right the fourth signed to me that you're on track for multi-millionaire status is that your liquid net worth is growing so that means your investment accounts your retirement accounts like your IRA or your 401k or your savings accounts and checking accounts any funds that can quickly be turned into cash is part of your liquid net worth
that number should be GR growing over time assets like a house or a car should not be included towards your liquid net worth because if you wanted to sell your house let's say today for cash it's unlikely that you could get the cash for it today when it comes to your liquid net worth the best way to ensure that it is growing is to actually just track it so personally I tracked my net worth in a spreadsheet but I have a free net worth tracking template that I can share with you guys down in the
uh description below it'll be completely free but what you should be doing is at least writing down the balance of your checking and your savings accounts your IAS and for 4 1ks and your investment accounts somewhere I personally have been tracking my net worth for about 6 years now and it's really incredible what has happened since I started tracking so first it shows you perspective because you can look back and say 6 months from now after tracking and you can see all your hard work and discipline is actually paying off in the form of your
liquid net worth another benefit is that just keeps Personal Finance in the back of your mind it's kind of like eating healthy if you're trying to lose weight if all of a sudden you're tracking your weight on a regular basis you might be more inclined to opt for fruit instead of candy these small micro decisions on a day-to-day basis really add up and compound over time and I actually saw a meme this morning about how dollars can add up over time and the Tweet says the it's only $5 why not buy it mentality has probably
cost me like $10,000 at this point in my life and that's absolutely true sometimes you just spend five bucks here and there and if you were able to add up all those times you actually did that it could be worth a lot of money so one of the goals in terms of liquid net worth in my opinion is to try to get to $1 million in liquid net worth and this is because at $1 million in liquid net worth your money has a lot of power when it comes to scale of course this is a
quite Advanced goal so if you don't think you're anywhere close to that perhaps set your goal at $100,000 instead but in terms of scale let me show you guys if your portfolio is worth $10,000 and you get a 10% return in the market that's an extra $1,000 if your portfolio is suddenly worth $100,000 the 10% return is now worth 10K but if your portfolio is worth a million dollar that same 10% return is now $100,000 a year let's say and that could easily replace your income and then some as your portfolio size grows you benefit
from the scale that Capital has and so having a goal of your liquid net worth growing year-over-year is definitely one of the signs that you're on track to being a multi-millionaire sign number five that you're on track is that you are taking action in terms of maximizing and optimizing your Current financial situation this can mean that you're taking advantage of tax shelters such as maxing out your retirement accounts or creating an HSA as an example both of these are examples of ways to reduce your overall tax liability and reduce the amount that you pay in
taxes maximizing your Current financial situation also depends on what age you are so for example if you were on the older side the strategy might be a lot different than someone who's the age of 18 when you're young you might be 100% in equities fully risk on and trying to make as much money as possible while risking a lot of your Capital but when you're older and nearing retirement you must protect capital above all else because if you have no capital for retirement then you can't really live that means when you're older it could also
mean that you're taking the proper steps in place to ensure that your estate is taken care of proper estate planning can actually minimize estate gift and inheritance taxes which helps you preserve more wealth for your heirs and loved ones I think the biggest takeaway of this sign is that you're being proactive about your finances you're taking control of creating an investing plan budgeting for the year ahead reducing your taxes or cutting back on spending where you might be spending too much I'd argue if you're watching this video you're already taking one step toward becoming a
multi-millionaire and hopefully you're subscribed so thanks for being here let me know what sign today resonated with you guys most in the comments below and if you're interested in the best wealth building strategies for every age make sure to check out that video right here and I'll see you guys in that video or a future one on the Channel all right peace [Music]
