That’s right, today is officially Be a Millionaire Day! Much cooler than Clean Up Your Room Day (5/10) or *gasp* Pi Day (3/14), but not nearly as tasty as National Fudge Day (6/16) ;)
Unlike cleaning your room or gorging yourself on fudge, however, becoming a millionaire takes some key things to pull off. Namely, having the drive and an action plan. Without either you’re just a dreamer like everyone else! (And guess what – they have their own day too: Sep 26th – World Dream Day!)
So for all you millionairings out there (that’s “millionaires in training” for the lay person), mark this fabulous day on your calendar each year and use it as a perfect check-in to see where you are. It’s not the end-all-be-all of personal finance – that’s financial freedom – but it’s a helluva good start in the right direction. And some of you frugalers COULD retire early with a million dollars banked! I can’t currently (my trusty spreadsheet says I need at least $1.5 Mil right now, which is better than the $2.25 Mil it was when we were paying $2k in daycare – yikes) but it’s always a work in progress.
And if you need some motivation – check out our Millionaire Club! Over 150 members so far – all pledging their to-do lists on how they’ll be reaching their first million: J’s Millionaire Club. Again, because you can either dream about it or you can DO SOMETHING about it. And so far 4 of our members have officially reached millionaire status! Some by investing, and others through real estate. Plenty of ways to hit it, you just gotta care enough to make it happen.
(And get this – the last time I blogged about our club? Two years ago on this EXACT same date – May 20th – without even realizing it was Millionaire Day. What are the odds???)
Anyways, since it’s been a couple of years since I last revisited my own pledge to become a millionaire, I thought I’d do it again today on this oh so special occasion. So….
I, J$, pledge to become a millionaire by doing the following every year:
- Max out my SEP IRA @ $11,000+ (or whatever I’m legally allowed to with my business)
- Max out my Roth IRA @ $5,500 (and continue upping it as the limits increase)
That’s it. $16,500+/year which will make me a millionaire by the time I’m 46 (11 years from now) according to CNN’s millionaire calculator. Now of course I’ll be doing more in the background like paying down my mortgages more and investing any extra money that comes my way as well, God willing, but at the very LEAST I’ll be maxing out both my retirement accounts every single year.
If you remember my post about how powerful doing just *one* thing can be, you’ll know it really isn’t that hard to get to a million dollars as long as you’re consistent and let time work its magic. I started with $56,000 in investments 7 years ago, and now have over $400,000 mainly from maxing out my two retirement accounts alone. The problem is that everyone wants to be rich NOW without putting in the time or effort. Which is fine, but not for people like us who are actually realistic :)
If you’re super eager to speed it up, you need to figure out a way to widen that gap between how much you make each month and how much you spend. Which means earning a $hit ton more or spending a $hit ton less until you’ve reached the goal. All very do-able, but all requiring a boost to your game and much easier to say than to do. Which is why people go back to dreaming or playing the lottery!
Other ways to get that money growing
Here are other ways to get the money ball going if you can’t quite max out your retirement accounts yet. It’s not so much *the amount* that matters early on, it’s the fact that you’re getting the compounding started. You’ll be able to contribute more as life and momentum moves on:
- Set up an automatic xfer of $50/mo into savings (everyone can do this!)
- Set up an automatic xfer of $100/mo into investments (almost everyone can do this too)
- Try the Digit / Acorns combo and have the money automatically saved/invested for you
- Drop $2,500 in a long term CD (as of 5/19/15 Discover is offering 0.95% APY for a 12 month term)
- Increase your savings by 1% each month for a year (check out Paula’s One Percent Challenge!)
- Try a “no spend” month (BOOM – automatic savings!)
- Track your spending for 30 full days (not as instant as the no spend month, but I promise you it’ll make you think twice about every future expense!)
- Increase your 401(k) contributions by 5% right now (you’ll notice it, but not as much as you think)
- Dump all your cash back rewards into savings! (The Discover it ® card gives you 5% cash back in quarterly rotating categories up to the quarterly maximum when you sign up. Which is also the card my man Eric used to get back $192.22 from price differences)
- Sell your extra car/clothes/TV/guitar/anything that can be converted to $$$
- Get a roommate/move back in with your parents! (I would actually consider either of these to bank more money if the wife wasn’t so opposed to it ;))
- Read The Millionaire Next Door (the best way to get your mind right)
Most of us will earn millions of dollars over the course of our lives, but it’s how much we *stash aside* that counts. There are plenty of people who have become millionaires on $40,000 a year, and plenty of others who haven’t making $200,000 a year. It all goes back to how you treat your money, and that now famous $8 million dollar janitor is perfect proof of this.
So get to saving, my friends! If not to become a millionaire, at least to reach financial freedom. Then you’ll never have to read this blog again ;)
Some interesting facts about millionaires before you go….
The first multi-millionaire in the United States was John Jacob Astor (1763 – 1848). Astor made his fortune in trade and later established the first trust in American history. His great-grandson, John Jacob Astor IV, was the wealthiest person aboard the Titanic. – PunchBowl.com
The term “millionaire” first appeared in the English language in a letter written by Lord Byron in 1816. There were only a few millionaires at the time, but thanks to the Industrial Revolution, more millionaires were created outside of the aristocracy. Today there are more than 12 million millionaires scattered around the globe. – DaysofTheYear.com
There are over 12 million “High Net Worth” individuals in the world, with the US having the most at 3.44 million and Japan and Germany following with 1.9 million and 1.0 million respectively (High Net Worth = at least $1 million in assets excluding primary residence.) – The World Wealth Report 2013
Only 20% of millionaires inherit their wealth. – The Millionaire Next Door
The average millionaire goes bankrupt at least 3.5 times. – The Millionaire Next Door
Half of all millionaires are self-employed or own a business. – The Education of Millionaires
The preferred car of millionaires is a Ford first, then Cadillac, then Lincolns. – Million Dollar Habits
On average, millionaires are 61 years old with $3.05 million in assets. – Yahoo Finance
Any of us can become a millionaire if you pay attention enough. – J. Money
What will YOU be doing today to get closer to a million dollars?? Make the pledge to yourself – or our club – and then jump right on it. I’ll check back in a year to see how you’re doing ;)
PS: This post was in partnership with Discover who gave me the heads up on Millionaire Day – my new favorite holiday! Thanks guys!
PPS: Being a “millionaire” can mean different things to different people, but in a nutshell it’s having $1 Million dollars in net worth. Now whether that is from real estate or investing or savings or however else you track/define it is up to you, but the point is to reach for the stars and not get complacent. All I care is that you’re steering the ship in the right direction!
[Dapper gent/’stache photo by Paul Stevenson]
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!