At first glance, building a net worth of $1 million might seem unattainable, but it’s more realistic than you think. You don’t need a winning lottery ticket or a trust fund to join this exclusive club.

Your annual income certainly plays a role, but how you allocate your funds matters more than your salary. When properly planned, a solid work ethic, responsible spending habits, and savvy investing can grow your fortune to $1 million — and far beyond.

Achieving this goal will require you to make sacrifices, but the feeling of financial security is priceless. If you’re serious about becoming a millionaire, it’s time to start making significant moves. Craft a solid game plan by incorporating some of these 12 tips into your lifestyle, and get on your way to making your first $1 million.

Boost Your Profit Margin

A profit margin isn’t strictly reserved for businesses; it also applies to you. “By increasing the gap between what you earn and what you spend, you end up with a profit in the same way a business earns a profit,” said J.D. Roth, founder of Getting Rich Slowly. “This profit can then be used to pursue your long-term financial goals.”

Roth said to reach a million bucks, you’ll need to boost your savings rate substantially more than the average to 15%. He suggested saving half of your income and noted that you’d have to make hard choices of deferring present spending in exchange for future financial success. He suggested living on one income and saving and investing the other salary for two-income families.

Start With $10 Million.

“Start with $10 million” is a joke, and it reflects how our brains tend to trick us into doing the wrong thing when investing. The best way to circumvent our “inferior mental angels” is to learn about investing, create a plan and stick with it. Our psychology often works against us, said Kirk Chisholm, principal at Innovative Advisory Group.

It’s not difficult to make a million with investing — if you start young enough and avoid psychological pitfalls, such as following the crowd. Avoid trading in and out of your investments. Create a sound investing plan, invest through thick and thin, and you can become a millionaire over time.

Those who buy and sell more frequently tend to underperform compared to those who buy and hold, according to Vanguard Research.

Turn Your Passion Into a Business

Passion alone won’t make your first million. There’s no substitute for luck and flexibility. “Find something you are truly passionate about, become the authority and do a business out of it,” said Joseph Carbone, wealth advisor at Focus Planning Group. “Not only will you be happy, but you probably will be very successful.”

The Chipotle story illustrates this. After finishing culinary school in 1993, Chipotle founder Steve Ells was excited about starting a fine-dining restaurant. Lacking funds for the upscale place, he took a small loan from his father and opened his first Chipotle to raise money for his exclusive restaurant.

After selling 1,000 burritos in the first month, his passion for cooking veered from a high-end restaurant into a successful path to wealth with the popular Chipotle Mexican Grill restaurant chain.

Furthermore, expect to fail along the way. Don’t be surprised if there are some bumps along the way before hitting that million-dollar idea.

Invest Early

Getting rich can be a matter of mathematics. It’s well documented that investing in the stock market over many years, reinvesting your dividends, and letting that money grow and compound can make you a millionaire.

But it’s also a matter of knowing how much to invest, what types of mutual funds, and how long. You can find out how much you need to invest, for how long, and at what return with a simple calculator.

Be Patient

Regardless of your path to getting rich, it will take time. Investing in the stock market takes years for your money to grow and compound. Starting a business and nursing it to success doesn’t happen overnight. When it comes to the math of compounding returns, the most significant financial growth occurs in the later years.

“Making your first million will often take longer than making your second,” said Daniel Zajac, certified financial planner and partner at the Zajac Group.

“The first million is often the hardest, whether it’s through building a business or years and years of saving. Stay committed, stay patient and keep your eyes focused on the goal.”

Don’t let the initial slow growth through compounding or the pitfalls of starting your own business thwart your long-term wealth aspirations. Fear and impatience can be your worst enemies when trying to make $1 million.

Invest In Real Estate

Investing in real estate has long been a path to wealth. However, it’s much easier to invest in real estate in lower-cost-of-living areas initially. If you live in San Francisco or New York City, you might want to invest in an up-and-coming area.

Paula Pant, the owner of the personal finance blog Afford Anything, is building wealth with a real estate portfolio. She said she saved enough to make a down payment on a rental solid with a strong positive cash flow. This means that money is left to go into your bank account after you pay the bills.

Over time, as you pay off the mortgage, you’ll ultimately own the property outright. Pant suggested starting with one property and repeating until you reach $1 million.

Adjust Your Lifestyle

Discard the myth that millionaires all spend with abandon and live high on the hog. In the book “Millionaire Next Door,” award-winning authors Thomas J. Stanley and William D. Danko studied how individuals became rich, and their findings were surprising.

“Many people who live in expensive homes and drive luxury cars do not have much wealth,” they wrote. “Then, we discovered something even odder: Many people who have wealth do not even live in upscale neighborhoods.”

The authors found that high salaries don’t necessarily translate into high net worth. Stanley and Danko found that those who accumulated the most wealth would be considered frugal and married to conservative spenders.

The gap between income and spending is an asset for those learning to get rich. Think about it realistically: You can’t build wealth if you spend all you earn — or worse yet, spend more than you make.

Max Out Your 401(k)

The government gives you a wealth-building gift: the 401(k) account. Here’s how you can use it to make your first $1 million: Enroll in your employer’s program and invest the maximum amount allowable by law — $19,500 in 2021 and an additional $6,500 catch-up contribution for those over age 50.

You gain an immediate reduction in your taxable income for any contribution to the 401(k). So if your income is $60,000, and you contribute $19,500, you’re only taxed on $40,500. The money grows and compounds tax-free if it remains in the account.

In practical terms, if you contribute $19,500 annually to your 401(k) and earn 7% by investing in an average stock mutual fund, you will be a millionaire in 23 years. Invest less or earn a lower return; making your first million will take longer.

“You don’t need to be the next Richard Branson to make your first million,” said Grant Bledsoe, founder of Three Oaks Capital Management and blogger at Above the Canopy. “Just take what the IRS gives you.”

Be a Wealth-Building Hustler

Choose a side gig to earn more cash if you want to make your first million. If you’re making just enough to pay for rent, food, and utilities, you’re unlikely to get rich. You don’t need to be brilliant to become a millionaire, but you do need to be disciplined, hard-working, and creative.

Wealthy entrepreneur and businessman Mark Cuban started creating income streams at age 12. He sold packages of trash bags so he could afford to buy the shoes he wanted, according to Biography.

In high school, he peddled stamps and coins for extra cash. He took college psychology classes in his junior year of high school, then skipped his senior year to begin college full-time.

This illustrates the wealth-building hustler attitude. He gave up free time and leisure to pursue his dreams. The same holds for many millionaires.

Invent Something

If you have a lot of really great ideas, take your best one and monetize it. It doesn’t matter if it’s a product or service, as long as people are willing to pay for its benefits.

For example, Spanx founder Sara Blakely became the youngest female self-made billionaire in the U.S. by inventing flattering undergarments to wear under white pants. Her net worth is currently $1.1 billion, according to Forbes.

Beanie Babies creator Ty Warner amassed a fortune from his stuffed animal empire. He wisely created an expansive product line and sold it in limited quantities, which caused the items to surge in popularity. Forbes estimates the former Dakin Toy Company sales rep’s net worth at $4.5 billion.

Maybe your invention solves a problem experienced by many or entertains the masses. Either way, people are willing to spend money on something that adds value to their life.

Grow Your Inheritance

You might think a relatively small inheritance — e.g., $25,000 to $75,000 — won’t go too far, but you can cash in by allocating the funds wisely. Marc Johnston-Roche, the co-founder of Annuities HQ, acknowledged the temptation to splurge with your newfound worth but advised investing instead.

“Work with a financial planner to create an asset allocation strategy suitable for your age group,” he said.

“This strategy will vary based on how much risk you’re willing to take and how much time you plan to invest these funds. It’s not a one-size-fits-all approach, so it’s important to get some professional guidance.”

To realize significant growth, Johnston-Roche recommended leaving the funds relatively untouched for the next five to 10 years.

“Additionally, by investing your money now and letting it grow, you’ll be able to take advantage of compound interest,” he said. “Compound interest can accrue significantly over time when you reinvest earned interest rather than paying it out.”

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