You may think that most millionaires are celebrities or technology magnates, but many of the wealthiest people — roughly 20 million in the U.S. alone — are regular people. Few know how to increase their incomes rapidly enough to amass that kind of net worth, but it isn’t too tough to do if you have multiple income streams from salaries, investment dividends, rental property income and business investments — that’s how a majority of millionaires generate wealth.
Here are nine steps to help you become a millionaire in five years or less.
Life Insurance Offer: The only term life insurance that never requires a medical exam – ages 18-60. Get your fast, free quote now. Step 1: Create a Wealth-Building Plan
Having a wealth-building plan is vital to ensuring financial freedom. An effective one calculates liabilities and assets and is continually modified as you pass through various life stages. However, a plan should take more than just your budget into consideration. It should also factor in your: Investments
Insurance
Taxes
Education
Retirement
Most experts recommend making a quantifiable financial plan — the kind that’s got concrete numbers and specific dates to measure your success. The sooner you start building a plan, the quicker you’ll start building wealth. How Can I Become a Millionaire in 1 Year?
Becoming a millionaire in a year is difficult if you’re not already making a lot of money. However, becoming rich takes immediate action. Start saving, investing and challenging yourself today. Step 2: Take Advantage of Employer Contributions
Taking advantage of your employer’s retirement contributions makes it easier for you to become a millionaire by reducing the amount of money you need to save on your own. Many of the country’s largest companies match 50 cents for every $1 contributed by an employee into a retirement account. While these contributions are typically capped at 6% of your salary, these benefits can add up to $200 a month to your retirement accounts.
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For instance, perhaps you make $50,000 a year and contribute $450 to your retirement accounts each month. Without employer contributions, you’ll have $1 million in around 40 years. If your employer matches your contributions for up to 6% of your salary, you’ll gain an additional $250 a month. That extra cash will allow you to become a millionaire in 34 years instead of 40. Step 3: Ask for a Raise
One of the best ways to amass a net worth of over $1 million is to increase the amount of money you’re earning. Asking for a raise is one of the quickest ways to accomplish that.
You should do your research before approaching your boss. You need to understand how much other people in your industry make so you can make an educated argument when it’s time for your annual employee review. Step 4: Save a Significant Portion of Your Earnings
You need to save a large portion of your income to accumulate a significant amount of wealth in a short period. Trim down your budget and live well below your means. Don’t take on extra debt, and don’t worry about the luxury items other people are buying.
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Build a strict savings plan so you avoid wasting money on unnecessary items. Many people start by saving 10% of their income and then increase it to 20%. You’ll quickly find that you are comfortable living on a smaller portion of your income if you diligently track your expenses.
For example, assume you and your partner make a combined income of $100,000 per year, leaving you with about $80,000 after paying taxes. You’ll put $25,000 into savings each year if you save 25% of your income. The remaining $55,000 is enough to live on in many U.S. states if you reduce your housing expenses and eliminate debt. Step 5: Develop Multiple Income Streams Supplementing your full-time pay by developing multiple income streams is another way to become a millionaire in five years or less. Starting a side hustle, picking up a part-time job or creating a home-based business are just a few ways to generate more money. Keep in mind that this income isn’t fun money. To grow it, you need to invest it. How Much […]
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