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How To Become A Millionaire By 40 (It’s Easier Than You Think!)

Have you ever wondered if it’s possible to be a millionaire at a young age? Or how to become a millionaire by 40, 50, or really any age before the average retirement of 65?

If you’re looking to retire early, live off of a million dollars, and don’t make a super-high salary, here’s what you need to know.

How to Become a Millionaire by 40Is it hard to be a millionaire by 40?

It’s not “hard” to be a millionaire by 40, but it will take work.

I will admit, it’s much easier to invest and save when you make a larger income (sometimes), but this doesn’t mean that you can’t become a millionaire on an average (aka under 6-figure) salary.

Related: How to Turn $100 into $1 Million!!

At what age do most millionaires become millionaires?

Surprisingly, the average millionaire becomes one by the age of 37. Yes, there are outliers, with many people becoming a millionaire earlier or later in life. But 37 is a great age and a bit earlier than the 40 age deadline!

It is important to note that “401k millionaires” or people who just invest in their 401k’s become millionaires at around 50. While that’s still a young age with plenty of room for early retirement, it shows that you should be investing in more than just your 401k.

Related: How Many People in the World Are Millionaires? (And How to Be One!!)

Where should I be financially at 40?

The experts say that by age 40, you should have at least 3x your salary saved. So in other words, if you make $50,000 a year, you’ll want to have $150,000 in savings or investments.

Of course, this is just a rule of thumb. Many Americans fall on both sides of that number. Some have less saved and some have more. But this is the absolute base number that you should try to reach.

Related: Where Should I Be Financially at 40? (Are You Behind??)

How to Get 2 Million DollarsWhat should my net worth be at 40?

As it stands,  the median net worth for people between ages 35 and 44 is $91,300. So it’s safe to say that having at least this amount of net worth is on par with most of America.

Of course, this post is about becoming a millionaire by 40, so you’ll want much more as your net worth. But, just like the other numbers on this list, this is just a baseline.

Related: What Is The Average Net Worth In America?

What percent of 40-year-olds are millionaires?

About 7% of Americans that are millionaires are between the ages of 40-49. There isn’t a set percentage of 40-year-old millionaires.

Related: How To Retire In 10 Years With A Million (It’s Possible!!)

Can I retire early with 2 million dollars?

Wondering if you can retire early with 2 million dollars?

Absolutely you can!

Many people are retiring early with less than that saved and invested.

But of course, this will depend on…

  • your daily living expenses,
  • if you have any debt to pay,
  • and other factors like health care costs.

Related: Can You Retire With 1.5 Million Dollars? (Hint: You Can!)

How To Become A Millionaire Before 40: Is It Possible?

So how can you become a millionaire before 40? Is it really possible? I mean c’mon…really??

Yes, it’s possible!

It will take determination and some smart investment choices, but many people have become millionaires by the age of 40, and quite a few of them started at the bottom and worked their way up.

What is the average savings for a 40-year-old?

The average savings by age 40 is about $17,799 to $35,599. This does not include investments, since that’s reflected in the average net worth. This is merely savings (like an emergency fund).

How To Become A Millionaire Making 40k A Year

Another question that pops up quite a bit… “Is it possible to become a millionaire making 40k a year?”

It can seem impossible to become a millionaire making 40k a year. But it’s not!

In fact, many of the “average millionaires” that you see never made 6-figures in their lifetime. It’s more about what you save and spend, not how much you make. Let’s talk about the ways you can become a millionaire.

Related: Can a Poor Person Become a Millionaire? (And If So…How??!)

can a poor person become a millionaireHow To Become A Millionaire By Age 40

As you can see, it’s possible to become a millionaire by 40. But how exactly do you do that?

We want to give you every tool that you possibly can get in that belt of yours for how to become a millionaire by age 40.

Here’s what we think you should try.

Pay Off Debt

First, it’s important to pay off any debt that you owe, especially high-interest debt. For one, it’s hard to save and invest money when you’re saddled with debt, and it should be a high priority to pay it off. This is especially crucial if you have a lot of debt.

Think about it this way… if you have 6-figure debt, that’s a significant cut in your $1 million dollars. And, that doesn’t account for interest. If you pay the debt off, you won’t have to worry about spending your hard saved money on it once you retire.

There are many ways to start paying off debt, and avoiding extra in the future. But the key is to be consistent until it’s paid off. No one wants to retire and still owe money on items they did or purchased years ago.

Related: Debt Snowball vs Avalanche Excel Spreadsheet (FREE Calculator!!)

Have An Emergency Fund

Want to know how to be a millionaire by 40? You’ve got to protect yourself from financial downfalls!

After (or even during!) your debt payoff, you’ll want to have an emergency fund. While the most common advice is to have $1,000 in savings, you may want to save more. This, of course, will depend on your circumstances.

As an example, single people with a good-paying job that live well below their means may not need to save as much as a single mother of 2 kids living in a high cost of living area.

A good rule of thumb is to try to save 3-6 months of your basic living expenses.

Related: How to Build an Emergency Fund From Scratch

Save & Invest Wisely

This one is key to becoming a millionaire by age 40, especially if you’re not a high-income earner.

It’s important to keep in mind that you can always invest if you have the money to do so. Don’t let debt payoff or building an emergency fund keep you from starting early if you can. But, if you’re following the step-by-step process (pay off debt, have an emergency fund, then start to invest…), now is the time to start!

There are many different ways to invest and build your million-dollar nest. However, these will depend on how much you want to manage your funds, if you’re willing to take risks, and if you would want to earn passive income.

The key is to save and invest your money consistently, no matter what you choose. You can’t time the market, but you can invest your money in order to reach your goal.

Related: How to Invest Money In Your 20s (And Become a Deca-Millionaire!!)

smart investment optionsBe Consistent

Speaking of consistency, you’ll need to continue to save month to month if you want to reach $1 million by the age of 40.

For example, you’d need to save $1500 a month for about 20 years (with an annual rate of return of 8%) in order to save $1 million. As you earn more and cut costs, you can save more and cut that time down. And, if the market performs well, you’ll also have a spike in investments too.

You may not always be able to save $1,500 a month, but saving and investing something each month will get you to your goal faster than not being consistent.

Related: Keep Investing Simple: The Secret to Wealth

Live Below Your Means

If you plan on retiring at 40, I’d advise you to sacrifice a lavish lifestyle (temporarily!) until then. By living well below your means, you have a better chance of meeting your investment goals each month.

  • Can you live in a smaller or cheaper place?
  • Can you get roommates to cut down costs? 
  • Maybe you can sacrifice travel for a few years?

While it may not be “fun” to live below your means, it can be worth it once you get to retire early — or at least have the freedom to make that choice.

Related: How to Live on 1 Million Dollars (And Not Run Out Before You Die!!)

Can You Become A Millionaire by 40?

It’s totally possible to become a millionaire by 40, but it’s going to take some work. But, if you start early in your investments, and focus on being consistent, you can reach millionaire status and be able to retire if you choose to do so.

Were you wondering how to become a millionaire by 40? It’s all about investing and consistency. Will you be a millionaire by 40?

Grow Rich Money Retirement

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.

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