8 Tips for Becoming a Millionaire

It turns out that most millionaires have similar habits and principles. That means you can start developing those same habits and following those same principles right now in order to become a millionaire yourself someday! Here is a list of million-dollar habits:

1. Stay Out of Debt

Our culture has this idea that in order to become wealthy, you must take big risks. People believe that in order to advance, you must obtain business loans and open lines of credit, and they justify this by referring to it as “leverage,” which is simply a fancy word for borrowing money and incurring debt. But here’s the thing: Debt is treacherous to your financial goals. Every time you buy something on credit or take out a loan, you dig yourself a deeper hole from which to climb. That money (plus interest) you’re sending to lenders could be used to fund your future!

People who went on to become millionaires realised this a long time ago. They didn’t want their most valuable wealth-building tool (their income) to be tied up in monthly payments.

Here are the facts: 9 out of every 10 millionaires have never taken out a business loan, and 73% have never carried a credit card balance in their lives. They’ll be the first to tell you that avoiding debt like the plague is one of the best ways to reach the million-dollar mark.

The bottom line is this: Avoid debt at all costs if you want to become a millionaire. And if you already have some, get rid of it as soon as possible and pay it off. The only “good debt” is none at all!

2. Invest Early and Frequently

The earlier you begin investing, the more likely it is that you will become a millionaire. It’s as simple as that.

If you start putting away $300 per month at the age of 25, and assume an 11% rate of return, you could be a millionaire by the age of 57. If you kept investing and retired 10 years later, you’d have a $3.2 million nest egg. And it’s only $300 per month!

Start investing as soon as you’re debt-free (it’s okay if you still have a mortgage) and have a fully funded emergency fund. There are no exceptions!

Maybe you’re in your 40s or 50s and you’re thinking to yourself, “Well… that’s great for those young people, but there’s no way I’m going to get there.” We want you to hear us loud and clear: it is never too late or too early to start, no matter how old or young you are. Begin where you are!

3. Prioritize your savings.

Congratulations if you’ve already begun investing! When it comes to retirement savings, the goal is to put 15% of your income into tax-advantaged retirement accounts such as a 401(k) or Roth IRA. Not 5%. Not 10%. 15% of the total!

Why? Because how much money you invest is just as important as the act of investing if you want to become a millionaire. We discovered that Baby Steps Millionaires who invested 15% of their income toward retirement took approximately 20 years or less to reach millionaire status from the start of their journey! Here’s how it would play out:

The median household income in the United States is around $68,000. So, if you put 15% of your income toward retirement, you’d have $10,200 per year, or around $850 per month. If invested for 30 years at an 11% rate of return, that money could grow to $2.3 million. And that’s assuming you never received an employer match and never received a single raise in your entire career (which is highly unlikely)!

According to our research, 70% of millionaires saved more than 10% of their income during their working years. They saved, and they saved a lot of money! How did they manage to save so much money? This is where the following two principles come into play.

4. Increase your income to achieve your goal faster.

You don’t need a huge salary to become a millionaire. After all, one-third of all millionaires never made a six-figure salary in a single working year! But if you want to reach millionaire status a little bit faster, then the best way to do that is to boost your income. The more money you make, the more you can invest!

How do you do that? You can ask for a raise or look for a better paying job. You can start that side business you’ve always wanted to start or sell some items that have been gathering dust in your basement. You can return to school (without taking out student loans!) or get training to improve your skills and earning potential.

Millionaires take personal responsibility for their lives, which is one of their distinguishing characteristics. To put it another way, they own it. Almost all millionaires believe they have control over their own destiny. They don’t just sit around hoping that things will change on their own; they go out and do something about it.

So, what are you waiting for? If you know you need to increase your income, get out there and do something about it!

5. Remove Unnecessary Expenses

Make sure you’re spending your money on purpose — and with a purpose — as you work toward becoming a millionaire.

More than nine out of ten millionaires say they live on less than they earn and stick to monthly budgets. And get this: 93% of millionaires still use coupons when shopping!

So, contrary to what you may have seen on TV or heard on cable news, the average millionaire lives a simple life. They do not squander their money on unnecessary items. Instead, they look for ways to reduce their spending in order to save more for the future. Small sacrifices can yield big results in the long run!

So, go over your expenses and compare previous month’s budgets. Where are your money leaks? Which budget categories appear to grow in importance over time? Here are a few suggestions:

• Insurance — Can you combine auto and home insurance? Can you get lower rates with a higher deductible? Look around and find out. Meet with an independent agent who can show you where you can save money.
• Cable(Satellite) — Have you ever heard of streaming services such as Hulu and Netflix (along with about 50 others)? You have, of course. Give them a shot — you can probably get the shows you want without having to pay for cable.
• Gifts — Resist the social pressure to buy extravagant gifts for family and close friends. If you do, you’re putting them under pressure to repay the favour!
• Restaurants — Here’s an interesting experiment to try: For one month, eat all of your meals at home and skip the coffee you get on your way to work every day. You’ll be surprised how much money you can save in just 30 days!
• Subscriptions — Gym memberships, streaming music services, magazine subscriptions… how many of these do you use? Consider cancelling a few of your monthly subscriptions.

Remember that whatever sacrifices you make now, no matter how big or small, will go a long way toward helping you achieve your goal of becoming a millionaire. And guess what? When you’re a millionaire (and you will be! ), you might just keep up the money-saving habits you started.

6. Keep your millionaire goal in the forefront of your mind.

The steps to becoming a millionaire are diametrically opposed to how most people behave, which means you’ll see friends and family going places, doing things, and buying things. And if you focus too much on what they’re doing, you could end up in big trouble with your own money.

Almost half of millennials (49%) say social media influences how they spend their money. That means they’re letting someone else’s highlight reel on their social media feed dictate how they spend their own money. No way! Don’t get sucked into comparison culture. Fight it tooth and nail. Let’s be honest: it’s time to stop spending money we don’t have to impress people we don’t even like!

Millionaires did not become wealthy by comparing themselves to others. Nope. When it comes to spending, only 7% of them feel any pressure to keep up with their friends and family. Instead, they focus on their own objectives and are unconcerned about what others are thinking or doing.

Instead of obsessing over what you don’t have, concentrate on what really matters: family and friends, your church, your career goals, and the legacy you’ll leave your children. These will bring you far more joy than a brand-new car or a destination vacation ever could.

7. Consult with a Financial Advisor

Here’s a question for you: If you needed heart surgery, would you attempt to perform it on yourself? Obviously not. That would be stupid! You’d look for the best heart surgeon available.

And wouldn’t you want to work with someone who knows what they’re doing when it comes to something as important as your retirement future? Working with an investment professional is one of the wisest investments you can make.

In fact, 68% of millionaires said they used a financial advisor to help them reach their net worth. You see? Building wealth isn’t a solo sport, and it’s a good idea to seek advice from people who know what they’re doing!

8. Put Your Strategy on Autopilot

You must allow time and compound interest to work their magic in order to become a millionaire. It’s a lovely thing. And if you want to meet your long-term financial goals, you must pay attention to the smallest details.

What exactly are we discussing? Keeping out of debt Constantly investing. Keeping yourself out of the “I deserve” trap. Year after year after year after year. Rinse and repeat. What’s more, guess what? You’ll keep doing those things even after you’ve made a million dollars because that’s what successful people do. You just keep going!