Do you want to be a millionaire in five years or less? If yes, then this book will help you get there. Millions of people are trying to become millionaires every day, but fail miserably. Trying to do it on their own. This guide will tell you how to become a millionaire in five years or less by working smarter instead of harder. You can learn how to generate passive income, which is the best way to accomplish becoming a millionaire in nearly five years or less.
Are you tired of struggling with debts and living paycheck to paycheck? This guide will teach you how you can become a millionaire in just 5 years or less. Even if you start with $50, it is possible to be a millionaire in 5 years or less! Just follow the step-by-step process laid out in this book. It has been proven to work by thousands of people!
Becoming a millionaire in five years is an extremely aggressive goal, but it could happen. Although hitting a home run with an investment is what dreams are made of, the most realistic path is to put aside big chunks of money every year. The historical average return for the S&P 500 index is 8%. With that return, you’d have to invest $157,830 each year for five years in order to reach $1 million.
Create a financial plan
Financial freedom starts with financial planning. Your plan should include where you’re at today, what your goal is, and how you’ll get there. Your financial plan should be written down with clear milestones of how much you want to have saved and by what date.
At each milestone, you’ll be able to assess your progress and make choices depending on whether you’re ahead of or behind the plan. You can adjust any of these factors:
- The deadline to reach your goal
- Your goal amount
- How much you’re saving each month
- The risk level of your investment portfolio
If you’re ahead of plan, you might scale back how much you save and enjoy life a little more today. If you’re behind, it could be time to buckle down and learn some ways to make money while while also reducing your expenses.
Live below your means
Living below your means is when your take-home pay is higher than your monthly expenses and you have money left over. The more you live below your means, the more money you have to put toward your financial goals. Review where you’re spending your money each month right now, and decide whether those expenses are worth more to you than your goal of becoming a millionaire.
If your spending and financial goals aren’t in alignment, you can quickly cut expenses with these two strategies:
- Lower your housing expenses. Get a roommate, move someplace less expensive, or return home to live with your parents.
- Negotiate your bills. There are a lot of ways to lower your bills. Call your current providers and ask for discounts, shop around to find even lower prices, or use a service like Truebill to get your bills lowered for you.
Understand the power of compound interest
Albert Einstein once called compound interest the eighth wonder of the world. When interest is compounded, the amount of interest you earned during a given time period is added to your balance, and that new total (original balance + interest) becomes your new interest-earning balance.
For example, this is what it would look like if you started with $1,000 and earned 10% interest per year (which is the average stock market return for the past 90 years), compounded annually:
| Balance | Interest earned that year | Total interest earned | |
| Starting balance | $1,000 | – | – |
| After one year | $1,100 | $100 | $100 |
| After two years | $1,210 | $110 | $210 |
| After three years | $1,331 | $121 | $331 |
| After four years | $1,464 | $133 | $464 |
| After five years | $1,611 | $146 | $611 |
At the end of five years, you’ll have earned $611 in interest. As you can see, the interest that you earn continues to grow because the interest you’ve earned in prior years is now also earning interest.
Choose the right investing brokerage
After you’ve maxed out your retirement accounts, you’ll want to choose a brokerage account. This will allow you to continue investing your way to having $1 million by buying stocks, bonds, mutual funds, and ETFs.
When selecting a brokerage account, look for one that offers reduced maintenance and trading fees. Many companies have eliminated fees for online trading. If you’re unsure of where to begin investing, consider starting with an online service. Companies like Acorns, M1 Finance, and Stash offer simple investing platforms that make it easy for beginners to get started in the stock market.
Stash Benefits
- Get $10 to make your first investment
- Invest in stocks, bonds, and ETFs
- Fractional shares available
- Start investing with just $1
Automate your savings and investing
Once your accounts are established, automate your saving and investing. This way you never forget to put that money aside and you can focus your mental energy on finding more ways to save and make money instead.
Get paid what you’re worth
“The number one thing that will dictate your future earning potential and get you to $1 million the fastest is how much money you are being paid today,” Grant writes. “Unfortunately, you probably aren’t being paid what you are worth.”
The simplest way to boost your earning potential is to ask for a raise. Grant recommends looking at the salary range for someone with your level of experience in your industry, which will help you understand what you’re worth.
Then take that information to your boss and emphasize what you bring to the company. Remember, “it doesn’t hurt to ask,” he tells CNBC. “A lot of people are ultimately afraid that people are going to say no, and so they undervalue themselves and they undervalue their services.”
Save a ton of money … and put it to work
“In order to build wealth you need to be making as much money as possible on your money,” Grant writes. “Because you can only make so much money at any career, investing is truly the key to wealth.”
During his five-year journey to seven figures, Grant saved 50% of his income. Today, despite his financial success, he still focuses on living simply and sets aside 40% to 50%.
The key, Grant says, is to make things automatic: “Talk to your HR company and have them start depositing at least 20% of your income directly into an investment account before you even see it. This is 20% of your income AFTER contributing to your 401(k). I have mine automatically deposited directly into my Vanguard investment account and the money then gets automatically invested into a mixture of index funds.”
Monitor your net worth
“I look at my net worth every day when I wake up in the morning and have my morning coffee,” Grant writes. “There are few greater motivations than seeing this number rise over time. No matter where you start from. I have been tracking my net worth for the past five years and my first balance was $2.26.”
He monitors his net worth using Mint.com, which allows you to link all of your financial accounts and displays your assets and liabilities. (Personal Capital does something similar.) Plus, it tracks your spending. “At the end of the each year I take a deeper dive into this data and track what I have spent the past year on everything so I can work to improve my spending,” he writes.
If bad habits are holding you back, don’t fret. Even the Millennial Millionaire is human: “In 2012 I discovered that I had spent over $3,000 on Mexican take-out food in one year, which is insane and taught me a lesson,” Grant writes.
BE BRAVE AND TAKE RISKS
Most of the people who have become millionaires are entrepreneurs and they are the ones who never hesitated to take risks in their business and life. To become a millionaire, first, you have to start your own business, if you are brave enough to start up a business, then that will be a great step which takes to the path where you end up as a millionaire. Not that starting a business is enough to become a millionaire, the most important thing is you have to be successful in your business and that completely depends on the way how you run your business. You have to learn more about your business to spend long hours and have to work hard to lay a better foundation for your business. Therefore, it is very important while deciding your business choices. Go for the one which you know very well and in which you are confident that you can stand and run the business. Incorporating innovative ideas in your business will help you to lead the business in a profitable way.
Max out your retirement contributions each year
The government encourages people to invest for their retirement by giving valuable tax breaks on retirement accounts. The best way to take advantage of these programs is by maxing them out each and every year. This ensures that as much of your money as possible is receiving these tax advantages.
Because the tax advantages are so powerful, there are limits to how much you can invest in your retirement accounts each year. In 2020, Traditional and Roth IRA limits are $6,000 per year ($7,000 if over the age of 50), and company retirement plans are $19,500 ($26,000 if over 50).
Conclusion
Another old but gold way to get rich quick is to open your own business. There are many ways to start a business and if you think of the value it might add to other people life or just satisfy their needs then I think that it can be a great passion for you.