How to become a millionaire and retire early.
Who wants to be a MILLIONAIRE and retire early? For most the answer is “I DO”. Not everyone can benefit from generational wealth but becoming a millionaire is not outside of your reach. How do you become a millionaire and retire early? The quickest route may be buying thousands of lottery tickets in hopes of striking it rich. However, the chances of winning a standard Lotto game are 1 in 8,145,060. These are not so good odds. The occasional flutter on a Lotto ticket is not out of the question as you may get lucky but leaving your financial future to the draw of a few random numbers is not a real plan. The Lottery ticket route is unlikely to achieve the dream of Financial Independence, Retire Early (FIRE) but through discipline and proper money management it can happen.
How long would it take to become a millionaire and retire early?
What if the million dollars was already within your reach and did not depend on Lottery tickets? Most people do not realise that over their working life they will earn a million dollars or more and have the ability to become a millionaire and retire early. On average a person will work 45 years over their lifetime and as the following shows, that is more than enough time to earn and keep that million dollar.
Median salaries
Note: We have used the median wage instead of the average wage as the average can be distorted by a small number of people on large salaries.
Based on the table above in Australia, Canada, United States and United Kingdom is very possible based on the money earned over your working life. However, only proper money management will determine your age of early retirement. For example in Australia the median salary is $59,800 per year and after 45 years of work Australians would have earned approximately $2,700,000. The first million is earned by the age of 36 years old. Being financially responsible can multiply the first million dollars earned and set the stage for early retirement.
How to keep your million dollars and retire early.
Now that you know how the million dollars will be earned within your lifetime, it's time to learn how to keep and multiply it. There are three main components to holding on to and growing your million dollars after you have earned it so you can be on your journey of early retirement.
1. BUDGETING
A budget helps you to manage your personal finances and determines where your money goes between pay cycles. It keeps track of your expenses and shows how much you have spent in comparison to the amount you have received. Using this tool will keep the hopes of becoming a millionaire and early retirement alive. Based on your budget plan you should always keep an amount for savings each pay cycle. Check out details on How to create a budget with the Personal Budget Tracker.
2. SAVING
Based on your budget, you have been putting aside an amount for savings out of what you have been earning. Do this continually and it becomes a habit. Put this amount aside every pay cycle in a bank account and never touch it unless it is an emergency. Set a target amount that you want to reach in your savings account. When this target amount is reached you can transfer it to an investment account to earn even higher amounts of interest on your money. Use this Savings Calculator to determine your total savings when you put aside a regular sum of money and use these money savings tips to boost your savings.
3. INVESTING
Base on your investment goals determine what investments you think are best for your time frame. This may be shares, bonds, property, or simply a higher rate investment account. Next take the savings amount, that you have been putting aside out of your earnings and invest it, preferably for the long term as time will see your investment grow.
Make regular checks to review the performance of your money. See how far away from the million you are and make the necessary adjustments. Maybe you will have to add more cash to get to your goal of a million dollar but never give up. Check out details on how to start investing today.
Final word
Becoming millionaire and retiring early is not a get rich quick scheme. However, earning a million dollars or more in your lifetime is within your grasp. How much of that million-dollar earnings you retain and grow starts by implementing a budget and being discipline to see it through. That budget will determine how much of your earnings you can set aside every pay cycle to keep that millionaire status alive. You will be surprised how quickly the dollars add up. When you have reached your target savings amount, transfer it to an investment to earn even more. This allows you to get to your goal quicker. Remember to be consistent and review your progress. There is no time like the present. What are you waiting for, start your millionaire journey today and retire early!