How do you become a millionaire by 30? That’s a question I’ve been thinking a lot about lately. I was cleaning out my basement recently and I came across an old book Millionaire by Thirty by Doug Andrew and sons. I reviewed it several years ago and I didn’t give it high marks.
Nonetheless becoming a millionaire by 30 is an intriguing concept. It’s extremely aggressive and not feasible for most of the population.
Putting Your Millionaire by 30 Plan Together
I’ve found that success relies on two things, having a plan and executing that plan. I’m going to tackle the easy part by giving you a millionaire by 30 plan. That’s the best I can do from my side of the keyboard. You have the difficult part: executing the plan.
1. Start Early
You simply can’t hope to make a million dollars on the last day before you turn 30. It’s important to have compound interest work for you over the last ten, and especially 5 years.
(I’m sorry if you are reading this a little later in life. If that’s the case, it may make more sense to set a goal such as how to be a millionaire in 10 years or how to be a millionaire in 20 years.)
2. Earn a Great Income
This can be a double-edged sword for millionaire by 30 race. Usually, to earn more income, you have to spend more time getting an education. I’m always in favor of great education, but you could graduate college with a lot of debt. High-earning post-college degrees like law school or medical school add more debt, and little time to become a millionaire by 30.
While this exercise is a race to an arbitrary finish line (30 years 0ld), your life is not. Earning a great income after 30 is critical to your financial success, so don’t let this race prevent you from reaching more important goals.
3. Save Money
I know people who make great incomes, but they spend all their money. I think they are happy with their spending, but it’s hard to know for sure. It’s common sense, but if you spend all your money, you won’t be a millionaire, right?
Saving money is good, but investing and compound interest is going to help. Because becoming a millionaire by 30 is so difficult you are likely going to need every advantage you can get. It’s unlikely that you are going to be able to work out 20% raises every year as in the example above, but investment gains can make up the difference.
My two favorite ways to invest are in stocks and real estate. Real estate is more work, but you may be able to use leverage and appreciation to get a million dollars faster.
5. Be Lucky
To be a millionaire by 30 you need a lot of luck. Hopefully, you were born into a good supportive family. Hopefully, you were born into a good environment (region of the world). Hopefully, your investments went well. Hopefully, you’ve been healthy. Hopefully, you get the idea here.
There’s a lot of hope and luck that goes into becoming a millionaire by 30. Not everyone has all that luck, so it may be important to adjust your goal. Some people have more luck. I like to say that Paris Hilton was effectively born a millionaire due to her parents’ great wealth. Not everyone starts life on an equal playing field.
If you’ve done most of these things and have some bad luck along the way, hopefully, you’ll still have a nice six-figure net worth to get on the path of being a millionaire by 40.
Millionaire by 30 in Reverse
One way to see if you are on the right path is to work backward from the goal. To get a million dollars by 30, you should have a certain amount of money by 29, 28, 27, etc. That is unless you are expecting some kind of huge financial event (stock options at a big company). Even if you have a big goal that requires aggressive gains, it’s best to look backward and see if you are on pace to have a good chance.
Here are three models. One shows 10% net worth growth per year, the next shows 15% growth per year, and the final one 20% growth per year. I picked these numbers because they are somewhat reasonable if you are a high-income earner and have good investment luck. Outside of lucky breaks, being a high-income earner is a prerequisite to becoming a millionaire by 30.
|Age||20% Growth||15% Growth||10% Growth|
Getting a Kid to be a Millionaire by 30
I have two kids (ages 7 and 8) and it’s really difficult to get them motivated to do anything but watch YouTube videos about Pokemon. If there was a career in that, they’d already be millionaires. Maybe they’ll make their own videos someday and become the next YouTube stars.
In the meantime, the kids are helping me with the dog sitting and earning a little money in their Kids Roth IRAs. I started investing their birthday money at ages 2 and 3 and the great stock market has worked well.
It’s a good head start, but they’ve wasted so much time learning how to walk and talk ;). They’ve used up 25% of their time to be millionaires by 30 and aren’t even 1% of the way there yet. What am I going to do with these slackers ;)?
Is It Worth Trying to be a Millionaire by 30?
I can’t tell you what is worth your time. If you really enjoy high-earning careers and entrepreneurism and you are great at them, more power to you. Most people have outside interests that don’t revolve around the singular goal of getting to a million dollars by an extreme, self-imposed, deadline.
However, there are benefits to being a millionaire by 30. For example, the odds are very good that with investing compound interest you can become a young multimillionaire. That gives you the freedom to do a lot of things later in life such as choosing to retire early or do some space tourism (if that happens any time soon.)
I find it’s better to have balance in my life, but I recognize others might benefit from setting the goal and having a plan to drive after it. In the end, you have to do what’s best for you.