How To Become a Millionaire (If You Weren’t Born Rich)

Have you ever wondered how the roughly 22 million Americans who are millionaires, according to a 2023 report by investment bank UBS, got to that point? Maybe you think it’s luck or inheritance, and often it is — but not always.

The truth is that anyone can learn how to become a millionaire. With careful planning and discipline, you can be on the way to reaching your goals. The key is to save early, budget thoughtfully, and learn to invest wisely to take advantage of safe and high-reward opportunities.

Here are some real-life strategies I recommend for making money and becoming a millionaire.

10 ways to become a millionaire

Almost anyone can become a millionaire with the right steps and a healthy dose of perseverance. Here are 10 ways you can try to reach six zeroes.

1. Create a financial plan

You can say you want to be a millionaire, but actions speak louder than words. Put your plan in writing so you can see what steps you must take to achieve your goals.

A financial plan is more than a budget; it’s a cohesive look at the big financial picture, including your:

• Income
• Assets
• Liabilities
• Financial goals

Be honest with yourself — and realistic. Assess where you are and then determine the steps to meet your goals. Put explicit milestones and concrete dates on each goal. For example, you might want to increase your income by 20% in the next three years or invest $10,000 by the end of next year. I suggest creating short-term, mid-term, and long-term goals, especially if you’re like me and need to see “quick wins” to make your goals feel attainable.

For example, don’t set a goal to save $1 million in 12 months because that’s unrealistic. Instead, set a number that feels within reach to keep you motivated. This method helps me increase my net worth when my goals are enormous and reaching them feels impossible.

2. Pay off your debt

Becoming a millionaire isn't just about having a portfolio with $1 million in it. It is also about growing your net worth. Net worth is the amount left over when you subtract the value of what you owe from what you own.

When you have debt, you rob yourself of opportunities to save and invest for your financial goals. Who would you rather pay, yourself or a bank/credit card company?

Every dollar of debt you pay off moves you one step closer to your goals. If unpaid balances are holding you back, make repaying them a priority over the other methods on this list.

3. Live below your means

If you’ve made a habit of spending more than you bring in, you may not even realize you're living above your means. I suggest taking a couple of hours to review your most recent bank statements, calculate how much money you bring in, and compare that against how much you spend each month. If the numbers come out negative, you’re living above your means.

When you live below your means, you have money left over after paying your expenses.

As you review your spending, check to see exactly where your money goes each month and decide whether your non-essential purchases are worth more to you than your goal of becoming a millionaire. If not, consider trading instant gratification for long-term financial success.

If you’re unsure where to cut your spending, here are a few ideas:

• Lower your housing expenses: Get a roommate, move somewhere less expensive, or return home to live with your parents.
• Negotiate your bills: There are many ways to lower your bills, such as calling your current providers and asking for discounts or shopping around to find lower prices. You can even use a service like Rocket Money to get help lowering your bills.
• Rethink your transportation: If you have high car payments or your car maintenance is excessive, consider switching to a less expensive car with a lower car payment, or even one you can pay cash for to save on unnecessary interest.

4. Increase your income

It tends to be easier to increase your income than reduce your expenses. You can only cut your expenses so much without drastically adjusting your lifestyle, but there are many ways to boost your income.

The average millionaire has multiple streams of income, sometimes as many as seven, according to IRS reports. Here are a few great places to start:

• Ask for a raise: Time it right and ask your boss for a raise. Sometimes, it just requires an open conversation about your value to the organization or possibly a promotion.
• Look for a higher-paying job: If there aren't opportunities at your current job, start searching for a new one that offers a higher wage or the opportunity for advancement.
• Start a side hustle: Side hustles are a great way to supplement your income in your spare time. Many side hustles, like driving for a rideshare company or making grocery deliveries, don't require a considerable time commitment. You can even learn to make $1,000 a day by strategically stacking your side hustles.
• Passive income: Building passive income is the best way to boost your income in the long term. Passive income is money you earn in the background. Popular strategies include purchasing rental properties and hiring a property manager; investing in stocks, bonds, and mutual funds; and participating in affiliate marketing.
• Start a business: Business ownership can be risky, but the rewards can also be massive. There are a lot of small businesses you can start for $1,000 or less.

5. Understand the power of compound interest

Compound interest is a gift you should never take for granted. When interest is compounded, the amount of interest you earn during a given time period is added to your balance. That new total (original balance + interest) becomes your interest-earning balance.

The key to capitalizing on compounding is to save or invest as early as possible. For example, if you invest $500 a month with a 10% rate of return (the approximate average stock market return), you’d have almost $622,000 saved after 25 years when you’re ready to retire.

Here’s an example of how much you’d earn with a 10% return rate if you started with $500,000 and made no extra contributions.

	Balance	Interest earned that year	Total interest earned
Starting balance	$500,000	-	-
After one year	$550,000	$50,000	$50,000
After two years	$605,000	$55,000	$105,000
After three years	$665,500	$60,500	$165,500
After four years	$732,050	$66,550	$232,050
After five years	$805,255	$73,205	$305,255

If you waited to start saving for a decade and only saved for 15 years, you’d have $201,000. But of course, it’s never too late to start.

6. Max out your retirement contributions each year

Speaking of investments, it’s important to maximize your retirement contributions annually. While you have many ways to save for retirement, always max out your 401(k) to at least cover the amount your employer will match. For example, if you have a dollar-for-dollar match up to 3% of your salary and make $75,000 a year, that’s like getting $2,250 free from your employer.

Of course, you should invest more than your employer will match when you can. According to experts, you should save 10% to 20% of your income each year, or as much as you can afford, up to annual limits. You’re more restricted if you invest in an IRA, as they have much lower contribution limits, but the most important thing is to invest consistently and let your money grow.

7. Choose the right investing brokerage

After you've maxed out your retirement accounts, you'll want to choose a brokerage account. This will allow you to continue investing your way to $1 million by buying stocks, bonds, mutual funds, and ETFs.

When selecting a brokerage account, look for one that offers reduced maintenance and trading fees. Many companies have eliminated fees for online trading. If you're unsure where to begin, consider a platform with various automated features to diversify and balance your portfolio.

Wealthfront, M1 Finance, and Betterment offer user-friendly investing platforms that cater to a wide range of investors and risk profiles. They let you choose a more passive investment strategy, so you don’t have to spend researching trades and timing your buys.

8. Invest in real estate

Investing in real estate can help you diversify your portfolio so you aren’t putting all your eggs in one basket. There are several ways to invest in real estate, including:

• Buying and holding: You can buy single-family homes, condos, or multi-unit properties and rent them to tenants for anywhere from a few days to years. Rental income can provide a steady cash flow while letting you take advantage of a property’s appreciation during ownership.
• Flipping properties: You can flip properties by purchasing them for a discounted price, fixing them up, and selling them for a profit in as little as a few months to a year. While this will cause more short-term capital gains in comparison to holding a property for a few years, you can quickly reinvest any profits to continue to grow your wealth.
• Starting with wholesale real estate: To make money faster, buy wholesale instead of buying your own properties to rent or flip.

9. Prioritize saving

In addition to retirement and brokerage accounts, open an emergency fund in a savings account. High-yield savings accounts offer better interest rates than traditional savings accounts, and you should have at least one for unexpected expenses.

I recommend automating your savings, so you always pay yourself first. Set up automatic savings via your bank account, through your employer, or even through your investment broker.

Also, consider banking any windfalls, such as a tax refund, income raise, or inheritance, into a savings account before spending any of it.

10. Network with millionaires

Motivational speaker Jim Rohn says we are the average of the five people we spend the most time with. I’m not saying you need to ditch your current friends, but you do need to spend time with successful people.

One good way to connect with wealthy people is to join the board of a charitable organization. Charities always need volunteers, and while you're there, you may also pick up some new skills.

By donating your time, you could meet current and retired board members or rub elbows with wealthy donors who would love to share their stories of success.

How to become a millionaire in 5 years

Becoming a millionaire in five years is an aggressive goal but not an unattainable one. Although hitting a home run with an investment is what dreams are made of, the most realistic path is to put aside big chunks of money every year.

The historical average return for the S&P 500 index is around 8%. With that return, you’d have to invest $157,830 each year for five years to reach $1 million.

	Account balance	Earnings per year	Total earnings
Starting balance	$157,830
After one year	$170,456	$12,626	$12,626
After two years	$354,549	$26,263	$38,889
After three years	$553,370	$40,991	$79,880
After four years	$768,096	$56,896	$136,776
After five years	$1,000,000	$74,074	$210,850

Obviously, investing almost $160,000 each year is not much of an option for the average American household, which made $80,610 before taxes and living expenses, according to 2023 Census data.

Even though you may not have a job making this much money, you can still achieve the goal of having $1 million — possibly in 10 years.

How to become a millionaire in 10 years

Becoming a millionaire in 10 years is much easier than doing it in five, but it still takes sacrifice and dedication. With an 8% average annual return, you'd need to invest $63,916 each year for 10 years to reach your goal:

	Account balance	Earnings per year	Total earnings
Starting balance	$63,916
After one year	$69,029	$5,113	$5,113
After two years	$143,581	$10,636	$15,749
After three years	$224,097	$16,600	$32,349
After four years	$311,055	$23,041	$55,390
After five years	$404,968	$29,998	$85,387
After six years	$506,395	$37,511	$122,898
After seven years	$615,937	$45,625	$168,523
After eight years	$734,241	$54,388	$222,911
After nine years	$862,010	$63,853	$286,764
After ten years	$1,000,000	$74,074	$360,838

It would be hard for most households to put aside approximately $64,000 yearly.

People who employ the FIRE strategy (financial independence, retire early) set lofty savings goals in pursuit of financial freedom. Some families choose to save one spouse's entire income and live off the other paycheck, and others focus on saving 50% of their household income.

Assume you’re an average family making around $80,000 and could save half of that, you'd be putting away about $40,000 each year. To reach the target of roughly $64,000 per year, you'd need to earn an additional $24,000 after taxes. For a monthly goal, that's about $2,000 each month, which may be within reach with the best side hustles.

Is it hard to become a millionaire?

No matter how you slice it, becoming a millionaire is hard if you’re not born with money, but it is possible. According to The National Study of Millionaires published by Ramsey Solutions in 2024, 79% of millionaires didn’t receive an inheritance from their parents. Instead, they made themselves millionaires through hard work, investing, and sound financial decisions.

93% of millionaires also say they became millionaires through hard work, not senior positions at work, which is uplifting for those who want to become millionaires but may not have cushy executive jobs. Believe it or not, millionaires often drive average cars, live in modest houses, and do things ordinary people do that would never make you guess they were millionaires.

Bottom line

As you learn how to become a millionaire, seek professional guidance from a financial advisor. Financial advisors can act as a sounding board for your investment strategies and offer advice on the pros and cons of various investment choices.

With calculated choices and consistent savings, you may increase your chances of reaching your goal of becoming a millionaire.