Did you know that there are currently 20.27 million Americans that are millionaires? That’s not a small number at all! And now it’s easier, more than ever, for you to become a millionaire too. Here is the fastest way to make a million dollars.
The Fastest Way To Make A Million Dollars: Start Saving NOW
Yep, it’s not really about how much you make, but when you start and how much you stash away. You don’t need a fancy job or expensive degree to make a million dollars. You just need to save more than you spend, and start as early as possible.
Personal finance experts all note that the sooner you start to save and invest your money, and the longer that compound interest can work in your favor, the faster you can become a millionaire.
In fact, you can use this handy investment calculator to see how much money you’ll have based on your current savings, age, and investments!
(really…stop reading now…then click the link above, download the investment calculator tool, and enter in your numbers!)
Now that you know the fastest way to a million dollars (ie. start now), let’s talk about a few ways you can save it up… But first, a few other methods if you’re not content with the scrimp and save for the long-term approach. 😉
Maybe you want to make a million dollars faster than the typical route of saving, investing, and waiting. This section is for you.
If you have $10 million, making a million dollars in a year could be pretty simple. Just put it all in the S&P 500 and it produces what it usually does — 10%. And 10% of $10 million is $1 million. Presto! I just earned you a million dollars in one year. 🙂
Ha…Just one problem. Most of us don’t have 10 million dollars (dang it!).
If you don’t have a ton of money, then I suggest you try to get a job with a million dollar salary. It’s not the easiest thing in the world to do, but they’re out there. It’s possible (for a select handful of us)!
Jobs That Earn a Million Dollars a Year
- Law Firm Partner
How Much Money a Day to Make a Million Dollars a Year?
Maybe you’re totally serious about the absolute fastest way to make a million dollars. You likely don’t have $10 million, and maybe you can’t quite get a $1 million salary at your day job. BUT, you can still get there.
Maybe you’re thinking about becoming a YouTube sensation or starting your own business or becoming a big-city lawyer. (These are all ways to do it…and more!)
If you had a goal to make a million dollars a year, how much money a day would you need to make a million dollars a year?
The math is fairly simple. Take $1,000,000 and divide that by 365 days.
The answer: $2,740 a day
Make nearly $3,000 a day and you’ll have yourself a million dollars by this date next year. Wouldn’t that be sweet?!!
Related: How to Turn $100 into $1 Million
Don’t have money right now? Thinking you can’t earn $1 million in a year with any of the method above?
Well, you’ve got to start somewhere!
And starting from nothing is as good a place to start as any. Want the fastest way to a million dollars? Implement all of the below steps. It certainly won’t hurt!
Create A Budget
First things first, you can’t know what you’re spending or saving if you don’t have a budget.
If you’ve never created a budget before, it’s fairly easy to do. Just remember to include line items for saving and investing as well.
Of course, in order to build up a million dollars, you’ll also need to save more money.
You can do this a few ways, including:
- Putting aside a specific percentage of your earned income away each week
- Saving all/any windfalls you receive
- Participating in savings challenges
- Round up what you spend and save/invest the change
Of course, there is no right or wrong way to save. But the key is to save as much as possible, so you can invest it and build your net worth to a million and beyond.
Capitalize On What’s Offered
Do you truly want to know the quickest way to make a million? Pay attention here. This is a big one.
Do you work for an employer who matches your 401(k) contributions? If so, don’t leave free money on the table!
Based on whatever your employer matches, at the very least, start putting that amount in your 401(k).
For example, you can invest up to $19,500 in your 401(k) in 2021. If you’re 50 or older, you can contribute an extra $6,500 (for a grand total of $26,000).
If your employer matches 100% of what you contribute, up to 6%, and you make $40,000 a year and contribute 6% of your salary, you’ll earn an extra $2,400 just for investing! That means instead of saving $2,400, you’ll actually save $4,800. And that goes a long way over the course of a career.
If your employer doesn’t match, that’s okay too.
You can either find a job that does, or at the very least, continue contributing to your 401(k) yourself. And, you’ll still be able to invest in other options as well, like a Roth IRA.
The Health Savings Account (HSA)
Also, you may qualify for a health savings account, which can also be beneficial when saving money at your job (and keep you on track for the fastest way to make a million).
To qualify for an HSA, you must enroll in a high-deductible health insurance plan. If you are, you can contribute up to $3,600 in an individual HSA or $7,200 for a family (in 2021).
Contributing to an HSA gets you a triple tax benefit:
- Contributions are tax-deductible,
- the money accumulates tax-deferred, and
- funds can be withdrawn tax-free at any time for medical expenses.
Now, you may be wondering how this helps you save more money. In order to make an HSA work for you, don’t spend the money in the HSA. Instead, let the money continue to grow for years. Then, when you retire and qualify for Medicare, you can then use the money in your HSA to reimburse yourself for all eligible expenses you incurred.
And bonus, an HSA can also pay for retirement healthcare expenses!
Make More Money
Of course, instead of just saving money, the fastest way to make a million dollars could be achieved by making way more money!
There are two ways to do this.
- You can make more money at your current job (or new job), or
- do it with a side hustle.
Make More Money with a Job
Let’s start with making more money with your job.
There are many ways to do this.
- You can ask for a raise,
- get a better paying job, or
- ask for more benefits (ie. more vacation hours, contributions, etc to make up for lower pay).
If you decide to get a new job, make sure the benefits and extra money balance out as well. There’s no point in making more money if you’re just going to end up spending it because of a longer commute, stressful hours, etc.
If you know you can’t make more money in your day job, but have some flexibility to earn more money outside of it, try side hustling.
There are so many different side hustles out there. You just need to find what works for you!
The key to side hustling is to not get used to the extra money. Relaxing on your budget can cause you to overspend, which is not the purpose. The purpose is to make more money in order to save and invest. And remember, you also have to pay taxes on side hustle income.
Diversify Your Portfolio
While some people get rich and become millionaires from one type of investment, many don’t. So, you need to make sure that your portfolio is balanced. For example, don’t just depend on your 401(k).
- Invest in stocks and funds outside of your company.
- Rent out part of your home.
- Invest in REITs.
- Earn and invest passive income.
The key is to have savings and investments across as many options as you can have, without being overwhelmed. That way, if one thing fails, you don’t lose all of your money.
Of course, you could have a financial advisor help you with this, but there are other companies (like Betterment) who do this for you automatically as well.
The choice is yours.
The Fastest Way To Make A Million Dollars: Bottom Line
Even the average Joe can become a millionaire. A few strategic investments, starting now, and keeping yourself in check are really all you need to get started. And, by following these tips, you may become a millionaire faster than you thought you would!
AUTHOR Kimberly Studdard
Kim Studdard is a strategy consultant and course launching expert. When she isn't spending time with her daughter and husband, or crying over This Is Us, you'll find her teaching other mompreneurs how to scale their business without scaling their workload.