How Long Will It Take You To Become a Millionaire?
Use these 3 productivity strategies to speed up time and create some peace of mind.
- by productivity strategist and best-selling author, Susan Sly | 5 mins 34 secs read
If your goal is to earn a million dollars, as an example, The Economist estimates that it will take you at least 19.3 years based on the rough estimate of US median household income of $52,000. In other words, as long as you can keep your job, you will eventually get there. Forbes Magazine contributor, Edward Siedle , declared that there is a pending retirement crisis with the average retiree having a 401k of only $25,000 on average.
The question isn’t about your desire to be wealthy and obtain material goods, the question is this – what kind of life do you want to be living twenty years from now? The average person isn’t thinking that far in advance. Go Banking published a recent survey and found that 61% of Americans do not have enough savings to survive for 6 months.
In my early years, I lived with my mother, and we were poor. When she got paid, we had groceries however as soon as those ran out, there was nothing in the fridge. My mother was also a slave to her cigarette addiction and pick-up used cigarette butts from the ground and smoke them. It was humiliating. Often our church came to our rescue however I made the decision early on not to be reliant upon others for my own self-preservation. I also decided never to be a smoker.
In 2003, I had a job that paid me about $20,000 per year. I started a business on the side and made my first million, cumulatively, in three years. Eventually, this business would earn well over seven figures annually and although it took tremendous discipline to do this while raising, and having children, it was worth it. At my former job it would have taken 50 years to make a million dollars; thanks to faith and sweat equity, I compressed time.
As someone who has mentored people to creating additional income streams for almost a decade and a half, I have a unique perspective on what financial peace of mind looks like. The following three simple strategies may seem like common sense however statistics illustrate that unfortunately, they are not common practice. Being organized enough to create a financial fortress is painful at times and that is why many people avoid it. The average person would rather be a slave to having the newest of everything as opposed to taking a good look at what they can truly afford, creating a solid savings account, and having the discipline to live into a solid plan.
The good news is that we can always speed up time. Let’s take a look at how to do just that.
1. How Much Do You Need and How Long Will It Take?
In my book, The Have It All Woman, I declared that we need not choose. Many people opt for today’s pleasure and think little about tomorrow’s pain. I do not believe in limiting ourselves however I do believe that the best things in our lives tend to come down to experiences and not necessarily possessions.
There is a minimalist movement happening, and as I have written about before in my research into Generation Z, the following groups of new adults have lived through a recession and have a greater understanding of how easily life can collapse. Thinking forward to where you want your life to be, ask yourself what is important – will it be travel, going back to school, learning a new language, pursuing a passion, or perhaps living into your dream of surfing every day in Costa Rica? Regardless of your dreams, there will ultimately be some sort of cost; even living off the grid in your own private jungle paradise means purchasing land, building a structure, and paying some form of taxes. Furthermore, you must have money for emergencies; especially health related ones.
Regardless of your age, I encourage you to get honest and take a good, hard look at how much money you need to retire. A million dollars, however, is not as much as it may seem. Considering inflation, a million dollars will likely be worth $1.6 million in twenty years, an increase of about 1.6, however items such as a gallon of milk may go up by 300%. The hard reality is that your money may not be worth as much in the future and that is why increasing your income and saving more is imperative regardless of your tax bracket.
2. Set Up an Automatic Monthly Savings Plan
My message is this – start with something! Compound interest is the most powerful tool we have. Ideally, your monthly savings should be 10% of what you bring home. When you start early enough, this can lead to very substantial savings. It takes tremendous discipline to do this however let me share this example:
According to the Bank Rate Calculator, a 25 year old who earns $50,000 per year, and saves 10%, with a meager expected income increase of only 8% over their entire career, will have $1.8 million by the time they retire. Assuming they own their property, and any children are now self-sufficient, and they are not paying for health care expenses for their parents, this individual can lead a decent retirement and live off of the interest of their investment, assuming 5%, which would be about $90,000 per year.
I do not care how old you are, start an automatic savings plan right away.
3. Always Have an Additional Stream of Income
There is no certainty whether you have a job or are your own boss. Multiple streams of income are essential. From the time, I was eleven years old, I had my own business. Even when I had a full-time job, working for the government or in management for a large corporation, I continued to have a sideline income.
Whether you have a network marketing business, some rental properties, or teach fitness on the side, having additional income is imperative. After the last recession, many learned this lesson the hard way as one estimate I was told by my friend, CPA, Sandy Botkin, was that an extra $370 per month would have saved the majority of the lost homes. My personal rule of thumb is that your additional income should be able to cover some of your necessities and if you are working full-time, and your side income is bonus money, then the majority of this income should be saved.
If you want to speed up time, make and save, your first million faster, you will have to have more money sooner. The discipline required to make additional income while still holding down a job is one of the best educations we can ever have. As someone who has done this herself, I can impart that the best thing that has ever happened to me in my own financial education is that I am not reliant upon anyone else to tell me how much I am worth. My financial destiny is in my own hands and that is what I want for you.
Ultimately, life happens and getting yourself organized now can be the key factor in how you will weather any storms. I teach my Organize Your Life students that managing their money, and understanding how money works, is not something left to others. Yes, we need CPA’s, and other professionals, however if we cannot discern how much we require to live on, have the discipline to save, and have a solid comprehension of how our portfolio works then we are burying ourselves in the sand.
Susan Sly is a bestselling author, keynote speaker, certified NLP practitioner, coach, and trauma recovery specialist. Susan specializes in helping people become more productive so they can lead ridiculously fulfilling lives. She is the mother of five and has been working in human potential for over two decades.
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