[[{“value”:”Image source: Getty Images
When we think about what it might be like to be wealthy, it’s natural to imagine becoming a millionaire. But is becoming a trillionaire possible? For most of us, probably not.However, data from Oxfam International finds that the five richest individuals globally have more than doubled their wealth since 2020. If that trend continues, the world could have its first trillionaire within a decade.
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But just because you may not have very strong odds of becoming a trillionaire doesn’t mean millionaire status is not within reach. Here are a few personal finance moves you could make to become a millionaire in your lifetime.1. Avoid high-interest debtWhen you take on debt like a credit card balance, you sign up to lose money to interest. That’s money you could be using to meet other financial goals.
More: Our picks for the best credit cards
If you eventually want to become a millionaire, try to limit your debt to a mortgage and auto loan only, if possible. You may end up paying a lot of interest on a home or car. But usually, the interest rates on mortgage and auto loans are far more reasonable than the interest rates credit card companies charge.Also, while you might pay a fair amount of mortgage interest in your lifetime, that loan is allowing you to build equity in and eventually own an asset of value outright. And with an auto loan, you’re paying for a vehicle that could be your ticket to holding down a job and earning an income. So it’s easier to justify debt of that nature.2. Automate your savings contributionsIt’s not easy to consistently fund a savings account or IRA. The money has to come from somewhere, and it may have to come in the form of things you’re giving up.But to grow a lot of wealth, you need to save some of your money. A good plan is to put your savings on autopilot so your account is getting funded regularly.The process of automating savings can hinge on the type of account you’re looking to fund. With a savings account or IRA, you can set up an automatic transfer from your checking account. With a 401(k), you can sign up through your benefits department to have contributions taken as payroll deductions.3. Invest your moneyPutting money into the bank could help your balance grow — eventually. But if you want to reach millionaire status sooner rather than later, then it pays to invest, particularly in stocks.These days, with bank accounts paying more generously, you might manage to get 4% on your savings. But the stock market’s average annual return over the past 50 years has been 10%. That’s a huge difference.So, let’s say you get into the habit of socking away $400 every month. If you keep that money in a brokerage account or IRA that delivers a 10% average annual return, in 33 years, you’ll be sitting on over $1 million. At 4%, you’ll only end up with about $318,000. Your contributions during this time will amount to just $158,400.Becoming a millionaire is something that’s apt to take effort. There’s no getting around that. But it may be more doable than you’d think. So while most of us are unlikely to eventually end up with $1 trillion in wealth, aiming for $1 million or more could boil down to avoiding the wrong types of debt, automating savings, and investing in the right assets.Our picks for 2024’s best credit cardsOur experts carefully review the most popular offers and select those that are worthy of a spot in your wallet. These standout cards come with fantastic benefits like generous sign-up bonuses, long 0% intro APR periods, and robust rewards.Click here to learn more about our recommended credit cardsWe’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”
Image source: Getty Images
When we think about what it might be like to be wealthy, it’s natural to imagine becoming a millionaire. But is becoming a trillionaire possible? For most of us, probably not.
However, data from Oxfam International finds that the five richest individuals globally have more than doubled their wealth since 2020. If that trend continues, the world could have its first trillionaire within a decade.
But just because you may not have very strong odds of becoming a trillionaire doesn’t mean millionaire status is not within reach. Here are a few personal finance moves you could make to become a millionaire in your lifetime.
1. Avoid high-interest debt
When you take on debt like a credit card balance, you sign up to lose money to interest. That’s money you could be using to meet other financial goals.
If you eventually want to become a millionaire, try to limit your debt to a mortgage and auto loan only, if possible. You may end up paying a lot of interest on a home or car. But usually, the interest rates on mortgage and auto loans are far more reasonable than the interest rates credit card companies charge.
Also, while you might pay a fair amount of mortgage interest in your lifetime, that loan is allowing you to build equity in and eventually own an asset of value outright. And with an auto loan, you’re paying for a vehicle that could be your ticket to holding down a job and earning an income. So it’s easier to justify debt of that nature.
2. Automate your savings contributions
It’s not easy to consistently fund a savings account or IRA. The money has to come from somewhere, and it may have to come in the form of things you’re giving up.
But to grow a lot of wealth, you need to save some of your money. A good plan is to put your savings on autopilot so your account is getting funded regularly.
The process of automating savings can hinge on the type of account you’re looking to fund. With a savings account or IRA, you can set up an automatic transfer from your checking account. With a 401(k), you can sign up through your benefits department to have contributions taken as payroll deductions.
3. Invest your money
Putting money into the bank could help your balance grow — eventually. But if you want to reach millionaire status sooner rather than later, then it pays to invest, particularly in stocks.
These days, with bank accounts paying more generously, you might manage to get 4% on your savings. But the stock market’s average annual return over the past 50 years has been 10%. That’s a huge difference.
So, let’s say you get into the habit of socking away $400 every month. If you keep that money in a brokerage account or IRA that delivers a 10% average annual return, in 33 years, you’ll be sitting on over $1 million. At 4%, you’ll only end up with about $318,000. Your contributions during this time will amount to just $158,400.
Becoming a millionaire is something that’s apt to take effort. There’s no getting around that. But it may be more doable than you’d think. So while most of us are unlikely to eventually end up with $1 trillion in wealth, aiming for $1 million or more could boil down to avoiding the wrong types of debt, automating savings, and investing in the right assets.
Our picks for 2024’s best credit cards
Our experts carefully review the most popular offers and select those that are worthy of a spot in your wallet. These standout cards come with fantastic benefits like generous sign-up bonuses, long 0% intro APR periods, and robust rewards.
Click here to learn more about our recommended credit cards
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.
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