Most children dream of growing up to be rich and famous, and some won’t have to wait too long to see at least the financial portion of the dream come true. Data collected by Betway Insider has revealed the average age to become a millionaire is only 37. Becoming a first time billionaire takes a bit longer, with the average age coming in at 51.
So, what is the secret behind how to become a millionaire? Like anything in life worth achieving, amassing wealth takes time and dedication. It’s never too early to start working toward your financial goals. If you ask a financial advisor, they recommend committing to saving a certain percentage of your paycheck from the day you start earning money.
As your salary increases, resist the urge to upgrade your lifestyle with every raise. The better choice is to allocate 50% of any bump in income to savings. You’ll still wind up with extra funds every month but avoid the trap of increasing your spending at the same pace as your income. The next step in the strategy is to grow your money through making smart investments.
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Your path
Don’t be concerned if you’ve passed 37 without becoming a millionaire. Amassing a million dollars is a good benchmark for motivation and is an accomplishment at any age. You can stay on track by committing to saving and investing throughout your life. Your investment strategy will be driven by your goals, risk tolerance, and stage of life.
When you’re in your 30s and your primary goal is building your assets, dedicating a substantial portion of your portfolio to growth investments is smart. Growth investments generally carry considerable risk in the short term, but you have decades to earn higher returns over the longer term. The same can be said for your 40s, assuming you plan to continue working and earning steady income for years to come.
If early retirement is a goal, then as you approach the targeted age, you may want to choose safer investments to protect your assets. Changing your risk strategy doesn’t mean you can’t continue to build toward a million. You will be investing a smaller portion of your portfolio in high risk vehicles, but you can continue to realize steady gains.
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Help getting there
As you go through the various stages of life, your goals will change, and your investments need to reflect that fact. Whether you’re continuing to earn or retired, a financial advisor can guide you toward investments that help you reach current and future goals, including becoming a millionaire and beyond.
Would it surprise you to hear the first million is the hardest? Read more about this concept on our blog page, and set up a consultation with one of our experienced financial advisors if you would like to discuss setting up or managing your portfolio.