How I Became an Unintentional Millionaire in My 30s
The Crockpot method — my journey towards financial freedom
When I was a kid, I thought it was an elusive dream to become a millionaire someday. What would that even feel like? When would that be? When I’m 60, 70, or 80? Would I even have the energy or ability to enjoy my hard-earned money by the time I achieve that “status”?
What would it take for me to reach the millionaires club? I don’t particularly excel at anything, I don’t have any extraordinary ideas that could bring me future wealth.
In reality, I didn’t need to do anything extraordinary to become a relatively young millionaire. It was all pretty straight forward— I kept a record of all my expenses, and I started saving and investing as early as possible.
For the most part, my investments were all long term and set aside automatically. I set it and forget it — like a Crockpot. One day when I was in my 30s, I had become an unintentional millionaire.
Here are the main principals — we’ve heard these all before, but they are really true.
Start as early as possible
The time value of money is indeed a glorious thing. If you are not taking advantage of this magic, you are truly missing out.
When you are 22 years old with your first adult paycheck, the concept of compounding growth is very obscure. Can you really conceptualize at that age what a percentage of that first paycheck would look like 10, 20, or 30 years into the future?
It might seem ambiguous, but the key is to take action as early as possible. Don’t stop at your first paycheck. Make it a priority to automatically set aside a percentage of all your future paychecks as well. It can be anywhere — you don’t need to overthink it. Even if you put it in a money market or index fund, it will grow exponentially over time and pay off in the long run.
Manage your budget
I started tracking all my expenses on a spreadsheet when I was a student. When I say all, I truly mean ALL my expenses — even if it’s $1 for a bus ride.
At this point, I have nearly 20 years of data that captures all my spending habits categorized by food, clothing, transportation, entertainment, etc.
In fact, I have never experienced adult life with an income while not closely tracking my budget. When you build this habit over time, it becomes very clear where your money goes and what type of spending is actually worthwhile.
Do not hold back on the things you love! You should definitely spend money on travel, home décor, fancy dinners, etc. if it is truly something that will make you happy. Anything else is a waste of money and your life will be no different without it. Why not put that excess money to work instead and invest it for the long haul?
Don’t be greedy
I get it. Millennials want it all, and they want it now. Even though I am biologically a millennial, I often feel that I was born with the mindset of the Silent Generation.
It often surprises me how people my age seem to have forgotten about the Great Recession. It shocks me sometimes to see my friends’ excessive spending as if everything will be rosy forever. With my Silent Generation mindset, I feel like I am always preparing for the next downturn.
Don’t let greed drive your investing behavior.
For most people, it’s natural to want that instant return in the stock market. You might get lucky sometimes, but most of the time — when you are chasing a quick and easy win, you will likely get burned. Just let the market do its job — slow and steady and like a crockpot. Investing should be a long term strategy to improve your own life; it is not something meant to show off to your friends about tomorrow.
I know the principals outlined above are common sense, and certainly not new to anyone. These are just practical concepts that I applied at an early age.
It seems like it should be a big accomplishment to be a 30-something millionaire. The reality is, I did not feel any different when I reached this milestone. I would not have even noticed this new “status” if I had not checked my Mint account.
What does this mean for my future? Can I finally quit my awful corporate job and enjoy my life? Is there some undiscovered passion I have that I am not aware of yet? These are all questions I hope to answer as I continue my journey towards financial freedom.
