Wondering how to become a millionaire in your 20s? Love that ambition! While generating that kind of wealth takes time, here’s what you have to do to get on the right track toward your millions.
Are you wondering if it’s possible to become a millionaire in your 20s? While it may seem like a goal achievable at a more mature age – if ever – there are certain steps you can take toward becoming a millionaire at a very young age. Find out which and start building your fortune!
Increase your income (but not your lifestyle)
The first step to increasing your net worth and building a millionaire account is growing your income. That growth could mean getting a side hustle, asking for a promotion or finding a better-paying job.
However, the mistake most people make as soon as they start earning more, is upgrading their lifestyle along with their income. More money means I can dine out more often, right? I can buy a newer car or celebrate with a shopping spree, yeah?
Well, not if you want to be a millionaire. That extra money you’ll be earning will be the basis of your new fortune, so save it well and keep reading to find out how to use it to your real benefit.
Now that your money will be piling up with the extra income (and all the strategies you can think of to grow it, like selling unused stuff) it’s time to put it to work for you by buying assets in your 20s that will build your wealth.
Stashing dollars under the mattress is (definitely!) NOT the fast-track to becoming a 20 year old millionaire, so you need to give that money a job: to grow for you.
Make your research on what are the safest and most profitable investment options, from stock trading to mutual funds or real estate, and start building your millions. If you are already investing in a retirement account (remember, it’s better to start sooner than later!) that also counts.
The idea is not to have a million dollars laying around at your disposal; much of that money will likely be in long-term accounts, but that doesn’t make you less of a millionaire, the money is already yours!
Don’t Be Afraid of Failure
Becoming a millionaire requires decisions, moves, investments. It also requires setting big goals and working hard to get them. If you’re scared of not being able to make it, of making a mistake or the wrong call then you won’t get anywhere.
While it can be scary taking risks, especially when they involve money, you need to see past that fear to find success; being afraid will only stop you from doing what needs to be done.
Not being afraid of failure is one of the top traits of successful people. As they say, nothing really happens in the comfort zone; so step out of it and start working on getting your millions.
Minimize Your Expenses
We already talked about not upgrading your lifestyle along with your income. Let’s take it one step further and try to minimize your expenses, especially the unnecessary ones, as much as possible. This is key if you’re trying to learn how to become a millionaire by 30 or even by 25.
The idea of being a millionaire, for most, is about being able to spend without looking at the bill, but remember that you’re not a millionaire just yet, and that in order to have 7 figures in your account (or various accounts) you first need to save as much as possible from your salary.
So look for ways to reduce your expenses and maximize your savings and investment funds.
Find a Mentor
They say that we become the average of the 5 people we spend more time with, and this also applies to your goal of becoming wealthy in your 20s.
Find people who have already achieved what you’re working for and start building relationships with successful individuals, those who are ahead of you and can help you in your way toward your goals. Ask them questions, learn from their successes and mistakes and get inspired by their motivation and wealth-building habits.
Being surrounded by people who walked the same path you’re walking will give you proof that your dream is possible; that will keep you going when you feel like giving up, and it’s key to become a young millionaire.
Diversify Your Income
On the road to being a millionaire, you don’t want to depend solely on one stream of income. Not only is it risky – life happens and you could lose those wages – but it will take you much longer to get to the millionaire status with one single revenue.
Instead, try to diversify your income as much as possible, investing in various things and building strong revenue streams that will keep you running even if one of them fails. Working 3 or 4 different jobs is probably not the most appealing idea, nor one that could make you a million in a long time, so focus on finding ways of earning passive income. Even making an extra $1000 a month can make a huge difference in the beginning.
It will require work and effort in the beginning, but once it’s established you’ll start earning some good money doing next to nothing: one of the secrets to becoming a millionaire.
Have a Positive Mindset
What does having a positive mindset have to do with making a million bucks? You’d be surprised to know just how much it does. The road to becoming a millionaire is not short, nor easy, and you’ll be facing quite a few challenges and bumps along the way.
Having a positive attitude will help you move past them without being too affected or overwhelmed and, more importantly, it may be what keeps you from giving up when you feel like it’s all falling apart.
To become a millionaire young, make it a game, and don’t place on your goal more importance than it deserves – enough to make you take matters seriously, not as much as would make you forget about everything else. You’ll probably learn a lot during the process and meet incredibly interesting people; having a positive mindset will help you make the most of both.
Create Intellectual Property
How to be a millionaire in your 20s? There are several ways, and one of the most effective ones is creating intellectual property. Create a new tool, book, seminar, or musical piece, patent it and start earning the revenues.
Whatever your field of expertise may be, there are always new things to be discovered or implemented, and you could make big-time money by creating something revolutionary.
It could also be the stepping stone to building something grander from it, like a new brand, other related products, or a whole enterprise. It may be the basis on which you build your millions, and most likely also a name.
Automate Your Payments
Chris Reining, an investor who retired at age 37 with a million dollars in his account, claims he did it in great part by implementing a tiny habit; automating his finances. How to make money in your 20s? Follow his lead.
By setting up your account to make your payments automatically, from student loans to credit cards to savings, not only you won’t forget to pay any bills and incur debt, but you will always be contributing to your savings account, avoiding the temptation of skipping it some months and using the money.
You should also automate your contribution to a retirement account, whether it’s a 401(k) sponsored by your employer or one you set up yourself, like an IRA account.
Monetize Your Abilities
If you have a hobby you really excel at or enjoy doing certain activities that could benefit other people, start thinking about ways to monetize them. Maybe you’re a great photographer – even if you do it just for fun – and your friends and acquaintances ask you to take pictures at their parties or events: charge them.
Maybe you do crochet to relax after a long day; start selling your creations. Paint watercolor landscapes to cope with stress? Find a way to sell them or take orders and paint for money.
It may sound frivolous, especially when it comes to charging your friends or putting a money tag on things you do for the love of it, but if you’re serious about your millionaire goal you’ll need to start thinking on money terms, and making as much of it as possible.
Focus on Learning
Educating yourself is one of the most important steps toward becoming a millionaire. Read books about finances and investments, blogs and finance newspapers. Being knowledgeable and informed will help you make sound financial decisions and walk a steadier ground as you make your way toward your goal. Even billionaires read and educate themselves constantly!
If you want to make money you need to know about money, so learn about the steps of other self-made millionaires and develop a strong interest and curiosity to always be in the loop of the financial world.
Sacrifice your Expensive Social Life
You’re in your 20’s, so logically you want to have a good time, go out with friends to clubs and buy countless drinks at your weekly bar meetings.
Working to earn your money and not be able to spend it may be hard, even harder at a young age, but remember that the sooner you start saving for your future, the more chances you have of building a substantial retirement account and enough money in your savings account to buy more drinks than you could ever have – AKA a million dollars!
Thinking about your goal will make you more inclined to resign to some little luxuries. Make note, however, that I’m talking about giving up your expensive social life, not the whole of it. Of course, you’ll continue to meet up with friends for a drink and enjoy a social life; just look for cheaper or free fun things to do.
You could go for a jog at the park, make a picnic instead of dining out or watch a movie at home instead of paying for movie tickets. There are tons of ways to have fun without spending much money, and it will make a huge difference in your savings account. Savings that you will later invest, and put to work to get you those million bucks.
Don’t Give Up
Last but not least keep going, even when it feels hard, unachievable or downright a waste of time. If you’re confident in your goal and your methods to reach it, don’t give up when things get challenging. Be persistent and keep on doing your best until you get through whatever situation it was that made you doubt.
Becoming a millionaire may be hard, but it’s a reachable dream that requires patience and discipline. You’ll be glad you didn’t surrender when you finally get there!