According to Dave Ramsey, any American can become a millionaire if they follow 8 basic principles. These guidelines are the result of a National Study of Millionaires that he conducted from 2017-2018. Interestingly, of the 10,000 millionaires he spoke with, a whopping 79% received no inheritance and 62% graduated from public or state schools. This means you don’t need generational wealth or an Ivy League degree to reach this milestone, you just need to stick to these principles.
Avoid Debt
While it’s not always possible to be completely debt-free, you should keep your balances manageable and monitor your interest rates. Whether you take the snowball approach to paying off your debt (starting with the lowest balance) or the avalanche approach (starting with the highest interest rate), make a plan to get debt-free.
Invest
Most millionaires reached their high worth through consistent investing. With multiple online tools and platforms available, you can begin building a smart investment portfolio.
Prioritize Saving
Investing 15% of your income into tax-advantaged accounts like a traditional or Roth TSP can decrease the time it takes to become a millionaire by 20 years. Plus you;ll be taking advantage of your agency’s 5% match on your contribution.
Reduce Expenses
Most of those surveyed make a grocery list when they go shopping and stick to it. This indicates a discipline across all aspects of their lives to spend their money on what they need as opposed to what they want.
Get Professional Guidance
When you’re tempted by lifestyle creep or frustrated that you aren’t hitting your magic number quickly enough, working with a professional, like an FRC® trained advisor, can help keep you on track to reach your goals.
Boost Your Income
It goes without saying that the more you earn, the more you can save and invest which will speed up your timeline to making the million-dollar mark. Keep in mind that one-third of those surveyed never made a six-figure salary.
Keep Your Goal In Sight
You won’t become a millionaire overnight, but when you focus on your goal and understand how it will impact the security of your future, the small sacrifices you make are well worth it.
Stick To The Plan
Discipline is the keyword here. Think long-term and let compound growth work its magic on your account balances. When the going gets rough, stick to the plan. Your future self will be glad you did.
For more information on reaching your financial goals, connect with an FRC® trained advisor who can put you on the path to financial freedom.
