Retirement and Financial Independence

11 Powerful Ways to Grow Your Wealth From Zero to One Million

Updated on April 29, 2024 Updated on April 29, 2024
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    Are you ready to take control of your financial future and embark on the journey to amassing one million dollars? We have a few tried-and-true strategies for creating wealth and achieving your ultimate financial goals. No longer will you be left wondering how to break through the barriers holding you back.

    One million dollars is and is not a lot of money, and the first million is the hardest, which is what people mean when they say it takes money to make money. Once you make the first million, your money starts doing the hard work. So let’s get those 1 million dollars!

    Unless you hit the jackpot, there are a few decisions you have to make at a relatively young age, and they can help or hinder your progress to seeing those seven figures in your bank account.

    1. You Need to Start Investing

    Investing is easily the most significant thing on this list. If you want to be a millionaire (or billionaire), this is how you do it. It is the most crucial step in your personal finance journey and the key to financial success.

    There is no substitute for time when it comes to investing. The earlier you compound your money, the faster you will make one million dollars.

    “On average, millionaires invest 20% of their household income each year. Their wealth isn’t measured by the amount they make each year, but by how they’ve saved and invested over time,” writes Ramit Sethi in his New York Times bestseller, “I Will Teach You To Be Rich.”

    In other words, a project manager could earn $50,000 per year and be wealthier than a doctor earning $250,000 per year — if the project manager has a higher net worth thanks to saving and investing more over time.

    You don’t need a lot of money or a lot of knowledge about investing to get started. M1 Finance is a great place to start, and there are no minimums, the fees are low, and the process is simple.

    If you’re not investing, stop reading this and just get started already. As they say, the only thing more important than timing the market is time IN the market, which is a great easy way to grow your nest egg.

    If you want to save on fees and have more control over your investments, then you’ll want to look at a popular investment strategy created by an expert; we recommend the All-Weather Portfolio by Ray Dalio.

    M1 Finance

    They're perfect for DIY investors who prefer a hands-off approach but can still pick individual stocks and funds. We specifically use them for the Golden Butterfly portion of our portfolio.

    These are a few more investment strategies we’ve covered:

  1. Ivy Portfolio
  2. Minimum Variance Portfolio
  3. Lazy Portfolio
  4. Permanent Portfolio
  5. Coffeehouse Portfolio
  6. Swensen Portfolio
  7. Larry Portfolio
  8. Dividend Aristocrat Portfolio
  9. 2. Real Estate Investing

    We have written a lot about real estate as a great source of passive income, and it is. A rental property can be a long-term investment, but you don’t have to buy a house and rent it out to make money on real estate.

    And you don’t need a lot of money to start.

    Fundrise lets you invest in real estate. It can be a great way to get your foot on the property ladder before you have the money to buy a rental property.


    Diversify into income-producing real estate without the dramatics of actual tenants. Fundrise eREITs are a diverse family of funds, each of which pursues a focused real estate investment strategy.

    Disclosure: When you sign up with this link, we earn a commission. All opinions are our own. I am investing with Fundrise

    When you are ready to buy a rental property, you don’t have to be a hands-on landlord.

    In fact, we created a course that focuses exclusively on a laissez-faire approach involving turnkey real estate: Rental Properties for Passive Investors.

    You’ll learn our criteria for finding (and closing) the right property, the foundations of a successful rental business, the advantages of shielding your assets with an LLC, market trends, managing cash flow, and much more.

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    3. Get That Free Money

    An employer-sponsored 401k retirement plan is the first foray into investing for many of us, and it’s an excellent place to do it.

    A 401k is a retirement savings plan sponsored by employers, enabling you to allocate a portion of your salary into an investment account before taxes. This money, taken directly from your paycheck and invested before landing in your checking account, grows without being taxed until you begin withdrawals post-age 59 1/2.

    This setup is especially beneficial for those tempted to spend readily, ensuring a disciplined approach to savings.

    A 401k also lowers your taxable income. For example, if you earn $5,000 a month and invest $1,000 into your account, you are only taxed on the remaining $4,000. Some employers offer to match.

    If you invest 6% of your income, for example, the company will match 3%. Even if you have high-interest consumer debt, like credit card debt, you should invest enough to get the match because it is free money!

    You can invest up to $20,500 a year in your 401k. Your employer will offer you a few choices of different investments; most plans are made up of mutual funds that include stocks, bonds, and money market investments.

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    4. Keep Track Of Everything and Budget

    What gets measured gets managed, so it’s important to know what is going on in your finances. It won’t matter how much money you earn if you don’t know how to spend that money well.

    A budget doesn’t have the magical ability to control your spending, but it can help keep you accountable and show you exactly where your money is going.

    We have you covered if you’re unsure how to set up your budget categories. If you don’t know how to allocate your money, use the 50/30/20 rule. It makes things nice and simple. Personal Captial has excellent free budgeting software.

    Empower is a free platform that can help you manage your money and track your spending. They also offer a robo-advisor service, but there are minimum investment requirements and fees to consider.

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    Once you have all your accounts linked, you can also leverage their Retirement Planner to plot exactly what your retirement would look like. Then, using a Monte Carlo simulation, they determine how likely you’ll reach the level of income in retirement that you’re hoping for.

    Empower: Retirement Planner

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  10. Get your Retirement Readiness Score™ in minutes.
  11. Run the Recession Simulator to get perspective on today’s market.
  12. Use Fee Analyzer™ to find hidden fees in your retirement accounts.
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    5. Be Smart About Debt

    In every life, some debt must fall. That’s not true for everyone, but it’s true for most of us.

    There is good debt and bad debt.Good debt is taking out student loans to get a degree in a high-paying field or borrowing money for a down payment on a home, and bad debt is buying stuff on credit cards you don’t need.

    And because you’re spreading the payments out over many months or years, you can buy the item you’re financing immediately instead of waiting and saving up enough money to buy it all at once.

    On top of that, good debt tends to carry a relatively low interest rate in the single digits.

    But good or bad, we want to pay off debt smartly. If you have student loan debt, you can refinance it for a lower interest rate through Upgrade. If you can refinance with an interest rate just 1% lower than your current rate can save you thousands of dollars over the loan term.

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    Should you wait to invest until you’ve paid off your student loan debt? No! Remember, there is no substitute for time when it comes to investing.

    Student loan interest rates (2-4%) might seem eclipsed by the stock market’s historical average return (7%), but the choice isn’t so clear-cut. While the market offers the potential for higher gains, it carries the risk of loss. Student loan interest is a guaranteed cost. The best approach depends on your specific loan rate, risk tolerance, and investment horizon. You might prioritize paying off loans quickly, or consider a mix of minimum payments and investing some extra cash.

    Credit card debt, on the other hand, is an emergency. Because the interest is so high, you need to pay it off as quickly as you can. If you have credit card debt, make a plan to pay it off. Just throwing extra money at various balances isn’t efficient.

    Use the snowball or stacking method to pay it off quickly and efficiently. You can apply for a balance transfer credit card if your credit is good enough. The card has a 0% APR period, so your transfer balance from a high-rate interest card can be paid off without accruing additional interest.

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    6. Ask For More Money

    Whether it’s from your 9-5 or a side hustle, if you want to make a million dollars, you need to get more money.

    Are you being paid what you’re worth? Do you even know how much you should be making? Most employers aren’t just going to give you a raise because you’ve been with the company for another year. If you want a raise, you need to ask for one.

    You can find out what people in similar positions in your area are making on sites like Glassdoor and PayScale. This gives you a starting point when it comes to negotiating a raise.

    Before you ask for a raise, compile a list of the reasons you deserve one. What have you achieved over the past year, and how has it helped your boss or the company?

    While getting a raise is great, it might not mean much more money in your pocket. The average raise is just 3%. If you want to earn more money, you should be changing jobs, and often.

    Those who change jobs every two years earn an average of 20% more over their careers than those who stay in the same position for longer.

    If you get a new job offer, don’t just accept whatever salary you’re offered, like a supplicant. Again, know what others in similar positions near you are earning and be prepared to negotiate for more money and better perks.

    7. Earn More

    Many of us are not fully stretched when it comes to finding time to earn extra money outside our day jobs. If we dedicate five hours daily to watching TV or browsing social media, reallocating a few of those hours toward income-generating activities could prove beneficial.

    And if you want to grow your wealth to a million dollars, you have to.

    Everyone should have more than one income stream. We could lose our jobs through no fault of our own, and then what? Even if you have a heart emergency fund, it’s nerve-racking not to have any money coming in.

    I'd rather hustle 24/7 than slave 9 to 5.

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    You can aim high and look to be an entrepreneur and start your own business while working full time, but that admittedly takes time to work on it and time before it starts to make any money. It can be worth it, though. Creating a niche website has very low start-up costs.

    8. Pick the Right Place

    After college, you need to decide where to live. You often have to decide this based on where the jobs are, and the jobs are in cities, and cities can be expensive.

    But there are low-cost cities apart from New York and San Francisco, both of which have some of the highest living costs in the world.

    Don’t discount smaller, “second-tier” cities when you’re looking for work. And don’t be dazzled by a significant salary offer. I can tell you that even low six figures don’t go that far in New York City, especially if you plan to throw a kid or two into the mix eventually.

    In New York City, an annual income of $80,000 can often be challenging to manage due to high living costs. Many people find it necessary to have roommates to make their lifestyle more affordable.

    In contrast, cities like Pittsburgh, Asheville, and New Orleans offer a lower cost of living, allowing your money to stretch further. While you won’t necessarily “live like royalty” on $80,000 or even $60,000 in these cities, you can expect a more comfortable and manageable lifestyle.

    Before you start applying for jobs, make a list of a handful of cities you’d be happy living in. Next, research sites like Glassdoor and PayScale to see what someone in your job, with your experience level, is earning in each of those cities.

    And finally, plug those numbers into a cost of living calculator and pick the top three cities with the best results.

    Now you can start applying for jobs in those cities. Many people aspire to be in a top-tier city or a city abundant with opportunities in their industry. However, if your goal is to make a million dollars quickly, the cost of living will significantly impact your finances. Moreover, the pandemic has transformed the work landscape in numerous ways. It’s increasingly common to find positions that are entirely remote, allowing you to live in a low-cost area while earning a big-city salary.

    9. Mind Your Credit Score

    A bad credit score will cost you money. How much debt you take on is partly determined by your credit score. When you want to borrow money for a home or a car or start a business, your interest rate depends on your credit score.

    The better your score, the lower your interest rate. Having a good credit score makes your life cheaper.

    There is no need to chase the perfect 800 score; you only need a score north of 760 to qualify for the best rates.

    You can get your free credit score at Credit Karma. While having a good score is essential, you don’t need to obsess about it. It’s vital before you borrow money so if your score is not ideal and you’re considering borrowing money, work on improving it before applying for a loan.

    Improving your credit score isn’t tricky, and while it doesn’t happen overnight, it happens faster than you might imagine.

    10. Don’t Buy Things You Don’t Need

    What do you do when you get a raise, bonus, or tax refund check? Do you blow it? If you continuously upgrade your belongings and lifestyle every time you come into more money, you will never be a millionaire.

    One common trait of wealthy people (and there is a very significant difference between being rich and being wealthy, you want to be wealthy) is that the wealthy live below their means.

    Avoid lifestyle creep if you want to become a millionaire.

    Spending well doesn’t mean not spending any money apart from what is necessary. That’s no way to live. But when you do spend your discretionary money, spend it on experiences rather than things.

    Studies show experiences like trips or hobbies create lasting happiness compared to stuff. Memories, connection, and passion fuel experiences, while things lose their shine. Prioritize experiences for a happier you! Experiences become a part of our identity.

    When you buy the concert tickets, you enjoy the anticipation of the upcoming show. You will probably attend the show with another person and enjoy it together, and the concert becomes a happy, shared memory.

    Buying experiences is much more satisfying and a good example of spending well.

    11. Avoid Checking Account Fees

    You might not think of fees when you think of ways you spend money because most fees are automatic; you don’t take out your credit card or cash to pay them. But you are paying them.

    If your bank is nickel and diming you, open an account with Upgrade.

    There are no fees with their Savings account.

    There is no minimum balance, so there is no fee if you fall below a specific dollar amount, no monthly fees, no overdraft fees, and no foreign transaction fees.

    While none of us wants to lose money to bank fees, it’s small potatoes when it comes to losing money to investing fees.

    That One Trick

    We apologize, but there isn’t a single trick to becoming a millionaire. Achieving a million-dollar net worth is the result of numerous small, daily actions and decisions. Becoming a multi-millionaire isn’t exclusive to lottery winners or tech startup co-founders.

    Save smart and secure your future! Just like building a sturdy house brick by brick, making smart money choices adds up over time. Sticking to a budget, avoiding impulse buys, and consistently saving creates a strong foundation for a brighter financial future. This discipline lets your money grow on its own (through interest), making you more secure in the long run. Small sacrifices today translate into a more comfortable tomorrow!

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Andrew Fiebert - Chief Nerd Andrew Fiebert is a thirty-something father of twins, data nerd, and has prior Data Engineer for Barclays Capital and iHeartRadio. He's spent the past six years growing this site into a multi-six-figure business with over 500 hours of free personal finance education that reaches over 1 million people every month. Andrew has a B.S. in Computer Science and has been featured in Quartz, Forbes, Business Insider, and The Telegraph.

Current Project: Making bloggers money with Lasso.
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