We all dream of becoming a millionaire and it really isn’t that far out of reach. With the right financial planning and lifestyle changes, there are simple ways to become a millionaire.
You don’t have to make a six figure salary or inherit a ton of money to become a millionaire, anyone can do it.
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According to one survey, over one-third of people with a net worth of a million dollars never had a six figure household income in a single working year.
The top three careers for millionaires surveyed were: teacher, accountant, and engineer!
The secret to becoming a millionaire is to be smart with your money. Find professionals that can give you proper guidance if you don’t know where to start.
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How to Become a Millionaire without a Six Figure Salary
Pay off Debt
To really acquire wealth, you have to get rid of any and all debt. Getting rid of your mortgage will take time but you need to stop adding purchases to your credit cards.
The more debt you have, the more you are paying towards interest. If you have more than one type of debt, start focusing on paying off the one with the highest interest first. This will save you more money over time.
If you are going to use your credit card, pay off the full amount every single month.
When you go to make a larger purchase, such as a car, furniture, home improvement, etc. save up for it and pay cash.
Increase Income Streams
You may be wondering, “how am I supposed to pay off all of that debt?” Increase your income streams to have more money to pay off debt and save for large purchases.
There are so many different side hustles that are available now. All it takes is some drive and ambition to get things going.
There seems to be something for every interest. You can be a virtual assistant, sell things online, become a tutor, etc.
Become a Self Made Millionaire
The earlier you can start investing, the better off you will be in the long run. You want to contribute the maximum that your company will match to your 401(k).
The goal is to invest 15% of your pretax income. Once you have contributed all you can to your 401(k), you can open a Roth IRA or invest in the stock market.
Buying stocks and bonds can be confusing so it’s always a good idea to get some financial advice if you don’t know where to start.
Personal Capital offers financial and investing advice. You can sign up for a free account. It’s a smart way to track and manage your financial life. Get financial tools and personal attention from registered financial advisors.
Invest something every month, even if it is only $10!
Have an Emergency Fund
It is so important to have at least 3-6 months of living expenses saved up in case there is an emergency. I know it can be difficult to save that much but that is where the extra streams of income come in to play.
If you have to replace something in your home or your car needs repair, you will have that money.
You won’t have to borrow from a bank or charge it to your credit card. It saves you so much money in interest payments over time.
Most millionaires still live frugally even after achieving their financial goals. They know the value of a dollar and want to get as much out of it as they can.
Warren Buffet still lives in the same house since 1958 and buys reduced price cars!
Try to drive your car for as long as possible. Every year you can put away money for a new one so that when the time comes, you can pay cash and avoid interest payments!
Use coupons when you go grocery shopping and stop eating out so much. Everyone can learn how to coupon. Use these tips for how to coupon when your short on time.
By living within your means, you can have the extra money in your savings account or to go towards investing.
Making lifestyle changes and getting in charge of your finances is s must if you want to become a millionaire. Some people will get there sooner than others.
It just goes to show you that you can become a millionaire without having a six figure salary.