Email FacebookTwitterMenu burgerClose thin

How to Become a Millionaire


One of the longstanding American dreams is to become a millionaire, even if that doesn’t mean what it used to, but how do you go about it? The median lifetime earnings for all workers is $1.7 million, according to research from Georgetown University. The median for workers with a high school diploma is $1.3 million, while the median for workers with a bachelor’s is $2.3 million. So, all you have to do to become a millionaire is graduate high school, work a median lifetime and never spend a single penny!  If only it were so easy. Becoming a millionaire takes a combination of increasing your income, reducing your expenses, avoiding high-interest debt and investing wisely. For investment help, consider working with a financial advisor

Increase Your Income

Increasing your income is one of the most important things you can do to become a millionaire. Increasing your education level has historically been one of the best ways to increase your income long-term, but with rising college costs and a tight job market, staying in school may not make you a millionaire any faster. In fact, if you go to school for the wrong career field it actually could prevent you from becoming one.

If you’re at the beginning of your career or considering a career pivot, you need to weigh any options the same way you would an investment. Would invest in a potential certificate or degree program pay for itself through an increased salary or other benefits? How long would it take? Be sure to include the lost income for the time spent in school in addition to the cost of the program.

If you’d like to stay in your current career, applying for jobs with another company can net you a big raise. The national average salary increase for switching jobs is 14.8%, according to the job website Zippia.

Even if you’d like to stay with your current job and your current employer, you can still aggressively pursue raises, bonuses and overtime. If occasionally working extra hours at your job to meet your long-term goals sounds miserable to you, it may be time to consider pursuing a different profession.

Consider a Side Hustle

Side hustles exist for almost everything, but not all of them are worth the time you invest in them. While earning money to complete surveys in your spare time sounds nice, you may find that working a single hour of overtime would equate to several hours of answering survey questions. 

When considering a side hustle, remember that you are investing time that you could either be relaxing or working. Make sure that your actual hourly rate of return on your side hustle after accounting for expenses is truly worth the hassle.

Simple side hustles that take very little mental or physical energy or ones with a very high hourly rate can help you down the path toward becoming a millionaire without burning you out in the process.

Reduce Your Expenses

how to become a millionaire

Even if you can manage to make 1 million dollars a day, you’ll never become a millionaire if you’re spending 1 million dollars a day. Reducing your expenses to a fraction of your income and investing the rest is the most surefire way to become a millionaire.

The median weekly earnings per person is $1,070 as of the third quarter of 2022, according to the Bureau of Labor Statistics. If someone earning a median salary ($55,640)  invested half of their gross income ($27,820) annually in a well-diversified portfolio with an average annual rate of return of 10%, they would become a millionaire in just under 16 years. 

Saving half of your income can be difficult, especially in very high-cost-of-living areas. If that same person earning $55,640 annually invested 20% of their gross income ($11,128) annually in a portfolio with the same 10% rate of return, they would become a millionaire in just under 24 years.

Even with the median salary, it’s still possible to become a millionaire if you don’t allow your lifestyle to inflate to your salary level and invest the difference.

Avoid High-Interest Debt

Low-interest debt can be fine to keep. A high-yield savings account is currently paying out a higher interest rate than the rate on most mortgages taken out between 2012 and early 2022. If you’re one of the people who has locked in loan rates under 5%, investing, especially in tax-advantaged accounts, will likely increase your net worth more over time than paying down your low-interest debt. But all the investing in the world won’t get you ahead if you’re carrying high-interest debt.

Investment rates of return can vary wildly depending on what your investment is and how long you avoid touching it. All types of investing can lose money, but generally speaking, a well-diversified portfolio can expect to earn an average annualized rate of return between 8 and 12%.

While investments, especially risky ones, could lose money, debt subject to interest is guaranteed to lose you money over time. Payday loans can reach interest rates as high as 600% annually. Credit cards can have interest rates as high as 36%, while auto loan and personal loan rates can be similarly high. While you can become a millionaire and still have high-interest debt, avoiding it or prioritizing paying it off aggressively will get you there faster.

Invest Wisely

Simply saving your money isn’t enough, you need to get it to work for you. Investing a portion of your income is a powerful way to increase your net worth over time. Investing in the most tax-advantaged way possible will help you keep more money in your pocket now while building your wealth and will later help you reap the rewards of your hard work.

Gambling is not investing. You can win big on sports, poker and risky stocks, but you can also lose big. The odds are stacked against you and you are not special. If you want to guarantee your future status as a member of the millionaire’s club, you’ll need to avoid get-rich-quick schemes. Working with an expert financial advisor can help you determine what to invest in and how to best invest for long-term growth and tax optimization.

The Bottom Line 

how to become a millionaire

To become a millionaire you need to increase your income, decrease your expenses, avoid high-interest debt and invest your money wisely. Becoming a millionaire is possible for many people, but it takes diligence, time and luck to avoid major catastrophes along the way. It’s best to take a long-term approach and tackle what you can instead of trying to rush this very lofty goal.

Tips for Investing

  • One of the best ways to accumulate wealth has long been considered to be investing in the market. It can be difficult to navigate all of the investment choices on your own, however. A financial advisor can help you create an investment plan and make sure you have chosen the right asset allocation for your portfolio. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • If you’re taking a look at what a potential mix of investments might look like in your portfolio, consider SmartAsset’s free asset allocation calculator.

Photo credit: ©, ©, © Wongsa-nga