So, you want to be a millionaire? Good news, that can be done. In this post we are going through 3 ways anyone can make a million dollars. It does not happen overnight, and you will have to work for it, but it is totally possible.
How to actually become a millionaire? There are several ways to acquire a million dollars. I have described 3 of them in this post, and I think they are doable for pretty much anybody. You can even choose to do all 3 of these ways. Let’s dive right into it.
1. Long term investing
This probably was not a surprise to you. Investing has made it possible for everybody to acquire wealth if the investing horizon is long enough. You can start this road towards a million dollars no matter where you work.
You don’t have to be in a high paid job to start investing. However, the more you can invest every month, the sooner you will reach those million dollars. Below I have some examples of how many years it will take on an 8% annual return to achieve a million dollars.
- 200 dollars per month for 46 years
- 300 dollars per month for 41 years
- 400 dollars per month for 38 years
- 500 dollars per month for 35 years
- 750 dollars per month for 30 years
- 1000 dollars per month for 27 years
- 2000 dollars per month for 20 years
If you want to calculate yourself, here is the calculator I use: https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
The sooner you start the better
As you can see, the more you put away every month, the sooner you will hit the million dollars according to these calculations. However, even if you double the amount of money, you put away monthly, it doesn’t cut the time you need in half, why is that?
Let me explain. The longer your investing horizon is, the more compound interest can do its job. This means that the interest your investments have grown will also begin to grow, and the snowball has more time to grow, when the investing horizon is longer. I have a post about compound interest, you can read it here.
There are also different kinds of investing opportunities out there. Some of them are complicated, and for beginners, already diversified index funds might be the safest option. At least in the beginning of your investing journey.
I have a post comparing active funds with passive funds and how much the fees can affect your return in the long run. You can read it here.
The good thing about this path to a million dollars is that you can pretty easily, with good money management put 200 to 500 dollars away every month. Even if you decide to choose some other way to those million dollars as well. If things don’t go as planned, at least you will have a backup plan to retire with a nice chunk of money.
Investing is probably alone the slowest path to a million dollars of these three, but it requires very little work and effort. That is why it takes time. You must be patient when investing, there are good times and bad times in the market, you just have to stick to your investing plan.
2. Getting a high paid career and climbing the corporate ladder
The second way to achieving a million dollars is getting a career that allows you to climb the corporate ladder and that way earn more. This can easily be combined with investing as well, but it will help you get to a million dollars faster, since the goal is to get paid more as you progress.
Usually, this path to a million requires a degree. That can be an expensive investment as well, since good universities are not cheap in every country. Sometimes, you can get it by just showing your skills, but unfortunately degrees are still often wanted.
The amount of money that can be made when in the right position with the right skills is huge. You could achieve a million dollars in 10 years easily if you play your cards right and have the commitment to your job.
This method to million dollars takes a lot of effort. You probably will have to work very long hours and improve your skills regularly if you want to get promotions at your job.
It is very difficult to tell how long it will take to achieve a million dollars this way, since it all depends on you, your skills, the career path you chose and the workplace you work at, as well as other factors, such as taxes and the overall economy.
3. Start your own business and work for yourself
A third way to get past that million-dollar milestone is to start your own business. This can be something small, you do on the side of your day job and then turn it into a large-scale business, to support you and your family. I have a post about how to start a business in 7 steps, you can read it here.
I think this is the hardest path, but it can also be the fastest and the most rewarding. When you see the first dollar you make with your own business, it can give you a huge boost of confidence and this way helps you move forward.
There are also no limits on how much you can earn with your business. You can scale it as much as possible; only the sky is the limit. Or nowadays, even the sky isn’t a limit, since some people are already conquering space.
Starting a business can be done simultaneously with the previous two paths to million dollars as well. You can have your own side hustle business, while you work on a high paid job and invest a portion of your income.
With this strategy, I would say you have maximized your chances of becoming a millionaire one day. Even if your business failed and you didn’t manage to climb the corporate ladder, you still have your investments growing.
It is important to keep your investments away from your business. You might end up risking all of your backup plans you have invested in and be left with nothing. The investing path is a good backup plan, if these two others don’t work.
If your business starts to take off and requires more time, you might have to quit your day job, even if it was a high-paying one to focus all your time and energy into your business. I have a post about when to quit your job to focus on your business. You can read it here.
All of these ways to million dollars require continuous effort and some luck. Some more than others, but they can be done. You can do things to increase your odds of succeeding. Is it hard to make a million dollars? That depends on the path you choose. It will take time and effort, but it is worth it.
Keep in mind that there is no guarantee of any of these things making you a millionaire. Pretty much nothing is sure in today’s world, but there are things you can do to increase your odds of succeeding.
There is no guarantee that the stock market will continue to give 8% annual returns. There is no guarantee that you will get a high paid job. And there is no guarantee your business will ever be successful.
However, there is a saying that goes “You miss 100% of the shots you don’t take”. This means that even though those are not 100% sure ways to make a million dollars, it is very unlikely that you would end up with a million dollars if you didn’t try.
Do your own research and choose what path to those million dollars you will take. Maybe combination of all of them, or combination of two. Whatever you choose, I wish you the best of luck on your journey. I have a lot of posts about business and personal finance that might help you on your path to a million dollars.
Hopefully this was helpful to you, have a nice day.
This is not investment or financial advice. Past returns are not a guarantee of future returns. Always do your research before risking your hard-earned money.