Who isn’t interested in becoming a millionaire before 35? At first, it may seem like an impossible task, only for those who hit the lottery, receive an inheritance or have a high-paying job. This is simply not true. What it takes are the following principles to follow. Ready, set, save!
Don’t Get into Debt Quicksand
In today’s society, it is very simple to get a loan for just about anything: a car, clothes, even a nice meal. But, think about how that debt will impact your future. We often think of a car as a necessity, but it really isn’t. Not the typical car at least.
The average car loan is around $500 for 5 to 6 years. Just think about how that money could be put to paying off other debt or put into savings. In that same 5 years, saving $500 per month could add up to $30,000, enough to pay off many other debts or invest into a savings account. $30,000 invested after 20 years typically yields over $200,000!
Takeaway: avoid debt at all costs.
Begin Investing Early
The old adage that the early bird gets the worm is true when it comes to investing. The earlier you start saving, the quicker becoming a millionaire comes true.
For example, if a 21-year-old begins to invest just $300 a month, by age 65 (retirement age) they would be looking at a $4.8 million nest egg! To become a millionaire at age 35, the amount saved each month would have to increase to $2,300 per month. An impossible task, right? Wrong!
Takeaway: invest as much as possible as early as possible.
Increase the Amount of Monthly Income
In order to save that type of money, there can be zero debt. This means paying cash for everything. Increase overall income in order to reach the goal faster. Get a second job solely for paying off existing debt or saving purposes. Increase skills and expertise in order to gain more income. Do whatever it takes to reach that goal. No one said becoming a millionaire by age 35 would be easy.
For married couples who are employed, it is easier to save more because they can live off of one spouse’s income and save the other. For example, if both spouses are employed and each brings home $2800 per month, if one spouse puts their earnings into an investment that yields and average of 12%, they will have amassed over $1,000,000 by the age of 35! If they are able to save some of the other spouse’s income, they will reach their goal even quicker.
Takeaway: increase monthly income as much as possible.
It is not impossible to become a millionaire by age 35, but it does take focus, strategy, and a lot of sacrifice. But, in a few short years, being a millionaire (without having to win the lottery) will be worth it.