How to Become a Millionaire Investing Just $200 per Month

How to Become a Millionaire Investing Just $200 per Month
How to Become a Millionaire Investing Just $200 per Month

How to Become a Millionaire

In this article, I am going to explain how to become a millionaire in 9 simple steps! Read on to find out how!

Tip: Save the image above to Pinterest so that you can easily find this article on how to become a millionaire with just $200 a month later!

How to Become a Millionaire with Just $200 a month!

That magical number—$1 million. Even though a million dollars isn’t what it used to be, having a million-dollar net worth will still allow you to live a comfortable (and awesome!) retirement.

And, sadly, it is still something most Americans won’t attain. But you can do it; it’s really not hard! It takes a little bit of discipline and dedication, but all it takes is $200 a month! And saving $200 a month is very doable for most families if they make it a priority.

So how does $200 a month become $1 million for retirement? The answer is compound interest. Albert Einstein called compound interest the eighth wonder of the world. When I first learned about the amazing power of compound interest in an extracurricular class I took with my husband while he was in college, I got hooked on personal finance.

I then began a serious study of personal finance, and it’s something I’m still passionate about, more than a decade later. Even if math isn’t your favorite or your best subject, like it wasn’t for me, you can still rock your personal finances. And I’m here to help you do it.

Practical Advice for How to Become a Millionaire

In a later section in this article I give very concretely, practical, simple steps you can take to have the money available that you need (as little as $200 a month!) to become a millionaire.

But before I talk about those steps to becoming a millionaire, though, I want to mention some other habits that are essential for those on the path to becoming millionaires.

1. Decide to spend and save intentionally.

In order to become a millionaire, you have to have a little bit of money to invest.

It does not take a ton of money to become a millionaire when you invest regularly over the long term (as you will see below). But you do have to be intentional with your money in order to have some money to invest.

2. Start from a solid foundation.

Before you begin investing, you should have some money set aside for the inevitable financial setbacks that happen in life.

The reasons are pretty simple. If you do not have an emergency fund, when something bad happens (and it really is a matter of when not just if), then you will have to stop investing to take care of the emergency—or worse yet, you might even feel tempted to pull money from your 401(k) or other retirement or investment accounts to take care of the emergency.

And that is something that you definitely do not want to do! So before you begin investing for retirement, start with a solid foundation. And part of that solid foundation is to have an adequate emergency fund.

Before beginning to invest, you really should have an adequate emergency fund. (That simply means that you have money saved in a separate savings account that is designated for emergencies only.)

A great place to park your emergency fund is with CIT Bank, which offers one of the best savings interest rates around. And right now, you can earn up to $300 when you open a Savings Builder account! Learn more or open your CIT Bank Savings Builder account here.

Learn how to build an emergency fund.

3. Create a spending plan.

In order to spend and save intentionally, you have to have a spending plan (aka, a budget).

If you want any money available to save and invest, that means that you cannot spend it all on living expenses. And that is where a budget comes in.

Even though a budget might seem restrictive, once you start doing it, you will actually feel like you got a raise! And that is because you will start finding places in your budget where you can reduce your spending.

Having spending (and saving and investing) plan really is the only way to win with your money and build wealth over time.

4. Begin looking for ways to reduce your spending.

As you begin to budget, you will find places where you can cut your spending. I will talk in much more detail below about 9 areas where you can reduce your spending in order to find the $200 a month you need to invest to become a millionaire, but here are a few quick ideas to start you thinking about it:

  • Think of ways you can cut your grocery spending.
  • Reduce the amount you spend eating out.
  • Spend less on entertainment.
  • Find ways to reduce your transportation costs.
  • Slash your utility bill.
  • Cut your housing expenses.

5. Find ways to increase your income.

Finding ways to reduce your spending in order to have money to invest is powerful, but finding ways to increase your income is potentially even more powerful!

And the reason is simple: there is only so much that you can do to cut your spending, but your ability to increase your income is nearly limitless!

For example, you could work to get a promotion or a raise.

You could start an awesome side hustle such as blogging to earn extra money on your own terms. Learn how I make $1,500–$2,000 a month as a newer blogger with these different ways that bloggers make money (and there are many, many other bloggers who make $10,000+ a month working part-time or full time from home).

You could get a second job or work overtime.

6. Start investing as soon as you can.

I will discuss this in greater detail below, as well, but because of the amazing power of compound interest, the sooner you can get your emergency fund in place and begin budgeting and reducing your expenses to have money available to invest, the better.

Why Become a Millionaire?

As I said above, even though a million dollars is definitely not worth what it was 50 years ago, it is definitely enough to provide a comfortable lifestyle in retirement if you spend that money wisely.

And fortunately, because of the many ways that you can make money today, becoming a millionaire has likely never been easier than it is today. For example, there are many side hustles that you can do from home that can give you a great additional income that you could use to invest potentially even more money toward your awesome retirement.

Interested in starting an awesome side hustle that you can do from home to make a great part-time or full-time income doing something that you love and working for yourself on your own schedule? Learn more about how to make money blogging here.

By having retirement savings of at least $1 million, you can open up a lot of opportunities that you otherwise would not have.

With $1 million or more, you can definitely have financial freedom. You will not have to work into your 70s. You will be able to do some travel and give to worthy causes and pursue other hobbies and pastimes. Depending on the type of lifestyle you want to have and where you choose to live, you may even be able to retire early or semi-retire early if you choose to.

No matter what it is that you are passionate about and what you want to accomplish in life, your path to get there will be easier if you have prepared well financially by setting and working toward those goals. You can learn more about how to reach large financial goals here.

How $200 a Month Becomes $1 Million

It definitely is realistic to become a millionaire by investing just $200 a month! If you graduate from high school or college and begin investing $200 a month by age 25 and work until age 65, and you earn a 10 percent average annual rate of return (very doable over the long-term with good growth stock mutual funds), then you would retire with $1,168,444.

If you are reading this article a little late in the game and you are already 30, you can still easily become a millionaire by retirement! If you saved $200 a month from age 30 to age 67 and earned an 11 percent average annual rate of return, still very doable with good growth stock mutual funds over the long term, you would have $1,126,825!

Don’t want to work till you are 67? No worries! Just up your monthly retirement contribution to $250, assuming you earn an 11 percent average annual rate of return, and you can still retire at 65 (if you started investing at age 30) with $1,137,492!

And what if you are starting even a little bit later in life than that? You can still become a millionaire with just $200 a month! By saving $200 a month from age 35 to age 69, if you earn a 12 percent average annual rate of return, still realistic over the long term with good growth stock mutual funds, you would have $1,033,592! 

And again, if you don’t want to work till age 69 but want to retire at age 65, then up your monthly retirement contribution to $310, and if you earn an average annual rate of return of 12 percent, then you would have $1,0005,488 at retirement! Or if you like to stick with round numbers, if you contributed $300 a month from age 35 to age 65 and earned an average annual rate of return of 12 percent, you would have $973,053!

So don’t give up on the awesome goal to become a millionaire by retirement! Becoming a millionaire is a great goal to help ensure you reach financial freedom later in life! And if you make those monthly contributions into a Roth 401(k) or Roth IRA, then all of that money will be tax-free when you withdraw it too! That means no paying Uncle Sam again in retirement. Woo hoo!

Note: Are you new to investing and want to know how to start saving for retirement? Do you want to know, generally, what kinds of retirement plans to invest in, how much to invest, what types of investments I would recommend for retirement, and more?

Read more…..

How to Become a Millionaire Investing Just $200 per Month

How To Invest In Crypto Coins And Become Rich In 8 Ways

Several Ways To Invest In Gold In India 2022

Credit: familiesforfinancialfreedom

Leave a Comment