It’s the club everybody wants to join and that’s not as diificult to do as you might think.
1. Make saving automatic
Sign up for automatic investing plans, which will funnel the savings directly from your paycheck into your investment account. That way the money starts compounding immediately. Plus, you\’ll never miss it.
Beginning at age 30, if you save $671 each month at an 8% return, you\’ll have $1 million by age 60. Begin at age 40, and you need to save $1,698 each month.
Key stat: 8.9 million U.S. households have a net worth of at least $1 million, not including equity in a primary residence.
2. Take advantage of Uncle Sam
Make full use of any tax-sheltered accounts that are available to you, such as a 401(k) or IRA. You may get tax breaks on contributions you make and assets in these accounts grow without the drag of taxes each year on capital gains, dividends and other distributions. That gives you a big leg up when trying to grow your nest egg.
Key millionaire stat: 46% of millionaire households own investment real estate.
3. Make stocks work for you
Stocks give you the best shot at high returns, having returned more than 10% a year since 1926, twice the return of bonds. So stash a big chunk of your portfolio in equities – 70% is a reasonable amount if you are investing over a couple of decades, says Kevin Sale, a financial adviser in Bloomington, Minn.
If you don’t consider yourself a stock picker, a broadly diversified index fund – tracking either the S&P 500 or Wilshire 5000 – is a perfectly reasonable option.
Key stat: Most wealth of millionaires comes from job earnings (32%). Just 16% is inherited.
4. Boost your earning power
As the numbers show, the fastest way to amass seven figures is to pull down a big salary. If you\’re young enough, a professional degree such as an M.B.A. or a J.D. will pay off. If more school isn\’t in the cards, make sure to get the most out of your current profession. Keep up with market so you can negotiate for as much pay as possible and if possible. And keep up with trade publications that will help you advance in your current field.
Key stat: The average household income for millionaires is $209,000.
5. Don’t stop saving
Remember, just because you\’ve stopped doesn\’t mean inflation will. As the years tick by, a million dollars will become worth less and less – and you\’ll need more and more to lead the lifestyle you were counting on. So when you hit the seven-figure mark, keep going.
Key stat: A millionaire in 1976 would need $3.5 million today to have the same buying power.
6. Start a Home Based Business (Affiliate / Network Marketing)
Experts like Paul Zane, Robert Kiyosaki, Donald Trump, etc have recommended you to consider this option.