How Can I Be A Millionaire In 10 Years – Are you seeking a way to make your fortune? Are you striving for that million dollar idea, the one that will change the world? Do you want that money to come from your hard work where you see it grow month after month until you reach a net worth of over a million dollars? Great! Then you have a lot in common with other millionaires.
Today, I’m going to talk about how you can be a millionaire in 10 years. I’ve been reading a lot of stuff from what it takes to reach financial freedom and lots of people have different definitions of it. But my question is, you would have been financially free if you have the money.
Focus on reducing expenses and living frugal
The first step of becoming a millionaire is to take control of your expenses. You need every single penny to go towards investments, not stuff.
You should have a method of budgeting or tracking your expenses. There are many different ways of managing finances, but it’s simply important that you start. The goal is to identify areas where you are spending unnecessarily.
Most people have certain areas where they overspend. It’s really easy to overspend when you aren’t tracking your finances. Usually, it’s the small expenses that add up over time which keeps you poor.
Invest $5k per month (10% ROI)
As we previously discussed, you can hit one million dollars in 10 years by investing $5,000 per month at 10% ROI. However, that is just one of the many examples of how to save $1,000,000. Investing simply relies on how much money you invest and what your rate of return will be.
For example, let’s assume you are able to get a 20% return on investment. In this case, you would only have to invest $2,700 every month.For most people, investing $2,700 it’s much easier than $5,000.
The question is, where are you going to find a 20% ROI?
Alternatively, you can find a way to invest more money at a lower rate of return. At a 6% return on investment, you would have to invest $6,200 per month.
What you need to do is find an investment strategy that works for you. You need to come up with a plan which specifies the amount of money you are going to invest at what percent ROI.
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.
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.
Stay Away From Debt
From cars to clothes to houses to jewelry, you can get a loan for pretty much anything nowadays. There’s this idea floating around our culture that you should get what you want whenever you want it. Get it now, pay for it later. (Hint: You’ll actually be paying more later thanks to interest.)
But here’s the thing: Debt is quicksand to your financial dreams. Every time you buy something on credit, you’re digging a deeper hole for yourself. That money you’re sending to lenders is money you could be putting toward your future!
Take the average car loan, which has a monthly payment of $577 and a term length of five years and nine months.1 If you invested $500 a month for five years instead, you could have $40,000. And look at this: If you invested that $40,000 for another 20 years, you could have over $293,000! Now, where’s that car 25 years from now? Probably rusting away in a junkyard somewhere.
Bottom line—avoid debt at all costs. And if you already have some, get rid of it and pay if off (Baby Step 2) as soon as possible.
Make Savings a Priority
If you’ve already started investing (Baby Step 4), way to go! But keep in mind, if you want to become a millionaire, how much money you invest is just as important as the actual act of investing. We teach you to save 15% of your income for retirement. But let’s just say you decide to skimp on that and only save 5%. Here’s how things would shake out:
If we apply that 5% to the median household income of $69,000, it works out to $3,450 a year or around $288 a month.2 Invested over 30 years, assuming a 10% rate of return, that money could turn into $651,000. Not too shabby. That number looks pretty great on paper, right?
Yeah, it might—until you find out the average couple will need $300,000 for medical expenses in retirement, and that doesn’t even include any kind of long-term care.3 If you subtract that amount from your investment total, you’d only have about $351,000 left. Can you live off that for two decades? It ends up being only $17,550 a year. Yikes.
Here’s a better scenario: If you invested 15% of that $69,000 income, you would be putting away $10,350 a year or around $863 a month. Over 30 years, that could grow to $1.9 million, assuming a 10% return. And if you waited just five more years, you’d be sitting on around $3.3 million. That sure beats $17,550 a year, huh?
Keep Your Millionaire Goal Front and Center
The steps to becoming a millionaire are the opposite of how most people act, which means you’ll see friends and family going places, doing things, and buying stuff. And if you spend too much time focusing on what they’re doing, you could be in big trouble with your own money.
Forty-nine percent of millennials say they’re influenced by social media to spend their money.7 That means they’re letting someone else’s highlight reel on their social media feed decide how they spend their own money. No thanks! Don’t get sucked into comparison culture. Fight tooth and nail against it. Let’s just be real here: It’s time to stop buying stuff we can’t afford to impress people we don’t even really like!
People who became millionaires didn’t get there by playing the comparison game. Nope. Instead, they stay focused on their own goals and didn’t worry about what other people were thinking or doing.
Instead of obsessing over what you don’t have, focus on stuff that really matters —family and friends, your church, your career goals, the legacy you’ll leave your children. Those will bring you much greater joy than a brand-new car or a destination vacation ever could.
Conclusion
Many people dream of becoming a millionaire in 10 years. But some people don’t know how. From starting a business or getting a luxurious job, these 2 million dollar goals can be achieved if done right. That’s why I put up this article for you who want to become millionaire in 10 years.