5 Steps to Becoming a Millionaire
By: Alan Olsen | Posted: 21st May 2006
In the year 2002, there were 17.1 million Millionaires in the U.S. By 2013, the number of millionaires will triple due to inheritance. For the rest of you, becoming a millionaire is within reach if you apply a 5 step plan involving the following areas:
Health
Spending
Savings
Investing
Career
Health
Take care of yourself. If your health is no good, you are not going to enjoy the rewards of a solid financial plan. Eat right, exercise daily, and discipline yourself. The most successful investors are those people who have the best discipline to stay with the program.
Spending
It's true, a person will always live up to the amount of income they earn. If you make the money, you are apt to find a place to spend it. The key to successfully saving is to spend less than you make and to also spend more money in areas that will actually preserve wealth.
Savings
A disciplined approach to saving reaps rewards in the future. While saving early in your career, allocate a larger percentage of your savings to stocks. A 35 year old with $10,000 and saving $500 a month will become a millionaire by age 56 if the money invested returns 15% per annum. If the investment rate of return falls to 10% per annum, the millionaire age is moved to 63 years old.
Investing
Focus on an investment portfolio that minimizes your fees and maximizes your returns. If you are not sure about the types of investments, consider low cost index funds such as the S&P 500 or Russell 5000.
Career
No matter how much you position yourself, your career will dictate how quickly you reach the millionaire plateau. You have to move above and beyond your job description; Excel in your performance; Make yourself invaluable to the organization. Align your goals and focus on efforts that make you a valuable employee. You want those merit raises. They will add up.
Check out the Groco Millionaire Calculator to determine how much you need to put away to enter the millionaire class: http://www.groco.com/tool/millionaire.aspx
About the Author
Occupation: Certified Public Accountant
Alan L. Olsen is the managing partner at Greenstein, Rogoff, Olsen & Co., LLP. He focuses on developing innovative strategies for business enterprises and individuals. A specialist in income tax planning, he frequently lectures and writes articles on tax issues for professional organizations and community groups. Alan has over 21 years experience in advanced tax planning including international tax, company reorganizations, multi-state taxation, financial statement preparation, stock options, estates and trusts, and representation before tax authorities. His website is ranked one of the top in the nation, featuring tax tools and business leadership articles: http://www.groco.com
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Tags: money, investments, rewards, investors, 1 million, stocks, career health, rate of return, plateau, becoming a millionaire, inheritance, investment portfolio, job description, year 2002