Tips to become a multi-millionaire!
Becoming a millionaire has never been transparent than this. A discussion of the guarantee way to become multi-millionaire at 50.
Having a seven-figure net worth is everyone’s dream. In fact, this goal is achievable and is easier than most of us have thought. So why haven’t many people reached this milestone yet? The answer lies in financial mentality. People tend to spend more than what they earn on something that they don’t need. At a lesser extent, people don’t spend their money, but rather keep it as a savings in their bank. With the inflation of the currency, their savings is actually decreasing in value over the years.
The only way and also a secured way to reach millionaire status is to reinvest your money consistently. Let’s take a look at my calculation below.
If one starts their 20s, when they don’t have family or someone that depends on them yet, by investing just $1000 for every month to the stock market and hold, they can have almost $2 millions by the time they turn 50. Let’s say the average stock market return rate is around 10% a year, with some periods even yield a higher result. Using compound interest formula, with $0 initial, $1000 contribution every month, hold it in 30 years without any withdrawal and the average return at 10% a year, the result is outstanding.
The secret to succeed is being consistent. Put aside $1000 every month to reinvest and you will become a millionaire one day. Some people might argue that they have other people to take care of, or what if they get married and have to spend more than when they are single. In my opinion, all of those are just an excuse for them to spend an extra $1000. When you are young, being frugal for several years would not kill you. One doesn’t have to buy nice shoes or a good car to have a decent lifestyle. Through time, our body becomes less robust, we have to take care of ourselves more, thus spend more. But we have to remember, through time, our paycheck is also getting bigger.
If one decided to go an extra mile by increasing their monthly contribution to $1500 or even $2000, their net worth will be much higher. We can see that with just an additional $500 every month, we can make an extra $1 million after 30 years (left figure). Moreover, instead of reinvesting for 30 years, we increase the investment length to an additional 10 years (right figure), the return on our investment increases up to 4 times, topping at more than $5 millions.
In order to summarize the path to become a multi-millionaire, keep in mind: consistency is the key. Live within your mean, live frugally when you are young and keep investing. One follows exactly the same strategy that is shown above and becoming a multi-millionaire will be within reach.
