The 7 Golden Rules of Becoming a Millionaire

Consistency is key here, and slow and steady tends to win the race.

When people think of what being a millionaire looks like, we tend to think of movies like The Wolf on Wall Street or The Great Gatsby (both Dicaprio movies, both amazing).

But this idea of what being a millionaire means is easily one of the most significant setbacks in our pursuits of becoming one.

Sure, some people really succeed in “get rich quick” schemes and some millionaires really have fancy cars, huge mansions, lavish parties, and private jets.

But the reality for most millionaires is much, much more practical. And practical is great news because it’s easier to follow.

Especially in today’s hustle culture society, there are so many varying pieces of financial advice floating around on the web. Some say to skip out on your daily latte, some say you should create a side hustle, and even more others say you should deprioritize sleep to have more waking hours to work with (pro tip: please don’t deprioritize sleep).

Earning millionaire status generally means managing your money well, avoiding impulse purchases, practicing frugality to grow your savings, and investing in income-producing assets as often as possible.

The following are 10 golden rules of becoming a millionaire, no matter how old you are or where you are in your financial freedom journey.

The 7 Golden Rules of Becoming a Millionaire

1. Save More and Save Early.

dollar bills in a red rubber band for savings

People tend to think of making more money first when setting out to improve their finances, but the best and most impactful place to start is by saving more money- and starting as early as possible.

The sooner you start saving, the more you reap the benefits of what Einstein called the 8th wonder of the world: compound interest.

As an example, let’s say you’re a young 20 years old. If you put $5,000 per year into a Roth IRA with an average return of 8% for the next 10 years, your total out-of-pocket investment would be $50,000.

Enter compound interest. Due to the “magic” of compounding, you would earn a total interest of $28,227.42 (free money!) on your initial $50,000, for a total of $78,227.42 at the end of the 10-year period.

The more and the sooner you can save, the more you’ll earn in compound interest. Bankrate has this nifty compound interest calculator for you to run some numbers on.

2. Stop Trying to Keep Up With the Joneses.

Oftentimes, people’s idea of what being a millionaire looks like is the exact thing keeping them from becoming a millionaire themselves.

Especially in today’s social-media-driven society, seemingly everyone is competing for who has the most expensive clothes, the nicest jewelry, the coolest cars, and the most lavish travels.

But getting into this habit of keeping up with the Joneses (or Kardashians if we’re being honest) is a surefire way to guarantee that you don’t achieve millionaire status.

Instead, keep your eye on the prize and stop trying to impress others with fancy things. After all, looking like you’re wealthy is not nearly as great as actually being wealthy.

3. Avoid the Debt Pileup.

Avoiding debt really boils down to one simple philosophy: Don’t buy things you can’t actually afford without taking on debt.

In most cases, people use debt (e.g. a credit card) to buy unimportant things, only to have to pay that money back with high interest (24.99% is the most common).

On top of that, the things purchased with debt usually don’t appreciate in value or earn them income. In short, debt makes – and keeps – you poorer.

As a rule of thumb, the only time you should use debt is if 1. you absolutely have to in order to get by, or 2. it’ll help you earn a higher return than the cost of the debt (such as with real estate).

4. Buy Low, Sell High.

man looking at his stock investments on his laptop computer

The markets, whether we’re talking stocks, bonds, or real estate, tend to be largely driven by the sentiment of investors between fear and greed.

When talks of a recession come about, fear sentiment is at its peak, and when the markets are in high gear, investors turn to greed (aka FOMO really kicks in).

As you can see, the best practice when investing is actually to do the exact opposite of what most investors do. The great Warren Buffet is famous for the following quote:

“Be fearful when others are greedy and greedy when others are fearful.”

Warren Buffet

When a stock or real estate is down for no other reason than fear, this presents an amazing opportunity to buy up your favorite investments at a heavily discounted rate.

5. Create a Budget and Stick to It.

Let’s face it: budgets aren’t sexy by any means. But they simply work, and that makes them a powerful tool if you want to become a millionaire.

If you’re new to the whole budget thing, here’s a quick snapshot of how to create one:

  • Log all of your income.
  • List all of your mandatory living expenses.
  • List all of your non-mandatory expenses, such as recreational spending.
  • Adjust your spending habits to widen the gap between your income and your expenses.
  • Reduce spending on things that don’t add value to your life.
  • If you have bad debt, prioritize paying this off first and foremost.
  • Invest and/or save the rest.

A very popular method of budgeting is called the 50/30/20 Budgeting Rule. This budget calls for 50 percent of your budget goes toward living expenses (mortgage, food, utilities), 30 percent goes toward recreational spending (fun, dinners, nights out, clothing), and 20 percent goes toward your savings and/or investment accounts.

This is a great place to start, but the goal is to find a budget that works for you and stick to it. Consistency is key!

6. Make Health and Well-Being a Priority.

man stretching his leg as he prepares to go for a run along a bridge

Sounds unrelated to the topic of becoming a millionaire, but this is arguably the most important step you could take toward achieving that goal. Aside from housing, food, and utilities, healthcare tends to be one of the most expensive bills that people deal with.

Suppose you don’t take care of your health and end up needing surgery or ongoing medication for a health condition. In that case, you’re suddenly pouring out money that will only work against your efforts toward becoming a millionaire.

On the flip side, if you’re healthy, you’ll be able to avoid these expenses almost completely.

You’ll look and feel amazing too, which will have a direct positive effect on your ability to make more money and enjoy life in the process.

After all, it would be a shame to finally become a millionaire but not in healthy enough shape to truly enjoy it.

7. Find a Career With More Income Potential.

“Choose a job you love, and you’ll never have to work a day in your life,” Confucius once said.

This famous quote certainly has a nice ring to it, but it doesn’t quite apply to the average person, especially in today’s society.

Think about it.

You may be wildly passionate about history or playing video games, but you’ll be hard-pressed to find high-paying opportunities in these fields.

A couple of people may have been lucky enough to earn lots of money in these fields, but the chances of emulating their success are low.

Instead, you should focus on pursuing a field that presents more income and more potential for it to grow over time. Some great industries are sales, web development, engineering, or marketing.

With your money flowing and your investments & savings accounts growing, you can enjoy your passions in your free time, even if that’s gaming.

The Bottom Line

If you want to have a good shot at becoming a millionaire, you have to say no to instant gratification and keep your focus set on the end goal.

Sure, it feels great to spoil yourself and your loved ones from time to time, and you should. You can absolutely enjoy the present without guilt and worry, just as long as you continue to stick to your budget and prepare for a secure and wealthy future.

Think about the time and flexibility (aka freedom) that becoming a millionaire will present.

When you no longer have to worry about how you’re going to keep food on the table or keep a roof over your head, you’re mental energy is free to be used on other things, whether that’s building a financial empire or simply enjoying some leisure time with your loved ones.

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