At any point in your life, becoming a millionaire can seem to be an impossible dream. But that's not true. The earlier you start making wise financial decisions, the more likely it is that you will eventually join the millionaires club.
However, in today's world, saving money doesn't guarantee that it will grow in value over time. You need to use a variety of strategies that not only put money aside that you give, but also grow it with interest. Here's a breakdown of how to become a millionaire by 30 below.
Increase Your Salary
Having the funds to pay for your investments that will compound your money is the first step to becoming a millionaire. You must have steady employment to properly get this money. To advance in your career and find a better position or company, you should constantly work to make yourself marketable. Consider keeping up with the latest advancements if you work in the field. Even if you don't work in technology, picking up a few technological skills can increase your income. Even if you are currently content, you should always work on growing your income.
Live A Frugal Lifestyle
You might think that millionaires are those who drive fancy cars and have the latest tech. That isn't true in the majority of situations, and it shouldn't be in your case if you want to become a millionaire. This is the time to look for sales or the clearance rack if you want to keep your money growing. Never pay the retail price; it is just not worth it. This holds for memberships to clubs and gyms as well as grocery stores, shopping malls, and the internet, as well.
Invest, Invest, and Invest
You could believe that saving in a piggy bank is wise financial planning. But truth be told, it's not. You are merely letting your money sit there ineffectively. It isn't bringing any interest. This is the case even for many traditional savings accounts. Although it is a wonderful start, simply having a savings account is not sufficient.
It's crucial to keep in mind that you should invest your savings rather than simply save them. Explore your options for how to begin building an investment portfolio for yourself.
Avoid Unnecessary Spending and Debt
There is no such thing as good debt. Even "good debt," as some people refer to it, is still money that is difficult to get and doesn't guarantee a profit in the future (a house, for example). There are, however, instances of both useful and unproductive debt. Credit cards are one type of productive debt. Yes, you do create debt every time you swipe a credit card because it doesn't get paid off until you settle your statement.
Put an end to your shopping sprees. Consider the following before swiping your card:
"Do I really need this?"
"Do I already have something like this?"
"Is this something I want more than being a millionaire?"
Spending money on things you don't need takes money away from investments so make your decisions wisely.
Use the 50/20/30 Budgeting Method
Every penny of your income should be set aside as soon as you receive it; otherwise, you risk overspending. The thought of having to spend every penny of your paycheck each month may seem overwhelming. According to Elizabeth Warren's 50/20/30 budget, you should allocate 50% of your income to necessities (groceries, rent, and utilities), 20% to savings (savings account, portfolio additions, Roth IRA contributions, etc.), and 30% to "lifestyle choices." This applies to food establishments, your phone, clothing, etc. Here is a breakdown of the 50/20/0 method for a person making Rs. 4 lakhs annually.
In-Hand Monthly Salary- Rs 30,000
Allocate 50% of your salary to the essentials (rent, groceries, utility), so Rs 15,000 should be kept aside from your salary for essentials.
Allocate 20% of your salary to savings, which means you have to put aside Rs 6,000 for investment.
Allocate 30% of your salary to lifestyle choices including clothing, phone bills, and trips, which means you have to set aside Rs 9,000 from your salary for this.
Manage Your Accounts
Not only can having a lot of different accounts and cards be confusing, but it could also hinder you from becoming a billionaire sooner. Diversifying sources of revenue is excellent, but outgoing streams should be kept as straightforward as feasible. Having multiple credit cards can require you to remember several due dates and, frequently, several credit pulls. These various outgoing streams might still tempt you to spend more than you had planned on spending in addition to potential monthly or annual fees.
Save for a Goal
Just as we discussed previously, it's vital to ensure you're saving for investments in a variety of areas with a specific objective in mind. Your daily savings should have a purpose in addition to growing exponentially in your investment and savings accounts to become a millionaire by the age of 30. You could recall several instances when you saw shoes on sale, and since they were 25% off last week's price, you thought purchasing them was a wise financial move. Nope. You don't necessarily need those shoes, and the Rs X you spend on them is an outgoing expense that can be saved or used in another way.
While it's good to enjoy that 30% of your 50/20/30 budget, it's also important to shop with a goal in mind. Gain a sense of satisfaction by saving money on bills, groceries, and household essentials rather than clothing or other costs that weren't in your budget before the discount came.
Commit to It
You must ultimately be committed to achieving this goal. It is a long-term ambition that you will pursue even after you earn your first Rs 1 million.
Aiming high (Rs 10 million) increases the likelihood of achieving still remarkable targets (Rs 1 million). A fantastic approach to make sure you are on the correct track is to have someone you can prove is doing well financially (such as a family member or acquaintance). Due to the unique nature of everyone's financial situation, nothing they say can be taken at face value. However, having them as your role model will ensure that you aren’t alone in this.
