Are you wondering how you can become a millionaire in 10 years?
While it may be an exciting goal, is it possible? Do you need to win the lottery, be the beneficiary of a large inheritance, or have a multiple six-figure salary?
Well, not exactly. In fact, many people have reached self-made millionaire status in 10 years without even having a college degree.
According to a report from Wealth-X, more than 65% of the world’s wealthiest individuals are self-made.
But what did it take? What decisions did they make? Did they have to eat nothing but instant ramen for an entire decade? I sure hope not!
In this article, we’ll discuss what it will take to become a millionaire in 10 years and, most importantly, provide practical steps you can follow to make it happen.
Can You Become a Millionaire in 10 Years?
While you won’t become a millionaire overnight unless you win the lottery or receive some other significant windfall, reaching millionaire status in 10 years is certainly an attainable goal.
However, that doesn’t mean it will be easy. You’ll need to make significant sacrifices with regard to your lifestyle, adopt an aggressive savings and investment strategy, and increase your income by starting a side hustle, etc.
How to Become a Millionaire in 10 Years
While there is no one-size-fits-all strategy to becoming a millionaire in 10 years, there are steps anyone can take to move in the right direction and increase their odds.
Here are 13 steps you should take to improve the likelihood you’ll become a millionaire within a decade:
- Create a Financial/Wealth-Building Plan
- Cut Your Expenses and Practice Frugality
- Become Debt-Free (Aside From Your Mortgage)
- Save and Invest Early and Often
- Automate Your Savings and Investing
- Learn a High-Income Skill
- Build Multiple Income Streams
- Start a Side Hustle
- Make Your Money Work for You
- Follow Dave Ramsey’s 7 Baby Steps
- Practice Stealth Wealth
- Lower Your Taxable Income
- Hire a Financial Advisor
Now that you know you can reach millionaire status in 10 years and the steps you can take to improve your odds, let’s explore them further.
1. Create a Financial/Wealth-Building Plan
If you’re serious about becoming a millionaire in 10 years, the very first step you should take is to create a financial/wealth-building plan.
Reaching millionaire status in 10 years won’t happen by accident; it will be through deliberate and calculated action.
According to Charles Schwab’s 2021 Modern Wealth Survey, only 33% of Americans have a financial plan!
Creating a financial/wealth-building plan should involve:
- Evaluating where you currently stand
- Determining your net worth
- Tracking your spending
- Finding ways you can cut back
- Setting financial goals
- Creating a budget
- Building an emergency fund
- Planning to pay off debt
- Creating an investment strategy
Once you have created a financial/wealth-building plan, it’s important you assess your progress and revise it at each stage of your journey towards becoming a millionaire.
You should also revise your financial plan each time you reach a milestone. For example, your plan should look much different after becoming debt-free than when you owed a lot of money on credit cards.
By frequently assessing your progress and revising your plan, you’ll know when you’re falling behind and why. You’ll also know any significant changes you need to make to get back on track.
2. Cut Your Expenses and Practice Frugality
If you want to be a millionaire in 10 years without winning the lottery or becoming the next Steve Jobs, one of the most significant sacrifices you will need to make involves your lifestyle.
Cutting your expenses and practicing frugality is all about living below your means. The more you can live below your means, the more you can save and invest towards your goal of becoming a millionaire.
To cut your expenses, find areas in your budget you’re spending unnecessarily. Evaluate each expense and ask yourself: Do I really need this? Is this something I can live without?
That said, here are several ways you may be able to cut your expenses:
- Housing: Move to a less expensive area, get roommates, move back in with your parents for a year, etc.
- Insurance: Shop around for better rates with a higher deductible. Bundle homeowners and car insurance.
- Electricity Use: Only run the dishwasher with a full load, don’t leave your desktop running 24/7, turn down the thermostat and dress warm, and hang out laundry instead of using the dryer.
- Cable: Cancel cable TV and use a streaming service like Netflix or Hulu. Streaming services likely have the shows you enjoy watching.
- Meals: Stop going out to eat and ordering takeout. Cook your meals at home instead.
- Beverages: Easiest way to save money? Stop spending $7 at Starbucks every morning and brew your coffee at home instead.
- Debt Consolidation: By combining multiple debts into one, you may be able to save on interest.
- Subscriptions: Never go to the gym? Cancel your gym membership. Evaluate all your monthly subscriptions and cancel any you don’t use frequently.
Remember, whether the sacrifices you make now are small or big, they’ll still have a massive payoff in the future.
3. Become Debt-Free (Aside From Your Mortgage)
Being a millionaire isn’t always about how big you’re portfolio is; it’s more about your net worth. Your net worth is how much money you have left over (value of your assets) after subtracting what you owe (cost of your liabilities).
While someone may have a $2 million portfolio, if they have $1.2 million in debt, they aren’t really a millionaire.
That said, debt is one of the biggest obstacles regular people face that prevents them from reaching millionaire status.
Not only does each dollar of debt you pay off save you from paying interest to a lender, but it’s also one more dollar you can invest towards becoming a millionaire.
Considering this, becoming debt-free (aside from your mortgage) should be one of your primary financial goals. Start by paying off high-interest debt first, such as your credit cards. Once you pay off your credit cards, focus on other consumer debt like personal, auto, and student loans.
4. Save and Invest Early and Often
The earlier and more often you save and invest, the likelier you will reach millionaire status within 10 years. Truth be told, If you’re just starting out, you will need to invest a huge amount of money per month, ideally $5,000 or more.
Assuming you received a 10% ROI, it would take right around 10 years to hit your million-dollar goal.
However, you may be able to receive a much higher ROI if you invest aggressively. While it’s unlikely, let’s just assume you manage to receive a 20% ROI. In this case, you would only need to invest roughly $2,700 per month.
That said, don’t worry too much and just aim to invest as much of your income as possible, whether it’s 15% or 35%.
You should be able to make up for the difference by learning a high-income skill, building multiple income streams, starting a side hustle, etc.
Related: How to Stop Spending Money and Start Saving Instead
5. Automate Your Savings and Investing
Once you have a savings and investing plan in place and accounts established, you should automate the process.
Simply set up automatic direct deposits from your paycheck and other sources of income into your savings account, brokerage account, retirement account, etc.
Not only will this prevent you from forgetting to set this money aside, but it will also reduce the urge to spend it on something else.
Furthermore, it will reduce the financial discipline needed to set aside a large percentage of your monthly income because you won’t be doing it yourself.
6. Learn a High-Income Skill
As previously mentioned, to become a millionaire in 10 years, you’ll need to work on increasing your income. One excellent way to do so is to learn a high-income skill.
Depending on your current employment, if you learn one of these skills, you may be able to get a better job without any schooling, certificates, etc.
However, this step is all about increasing your income from your primary job, so you should consider all your options.
If you’re not interested in learning a completely different skill, you can still increase your income by asking for a raise, working more hours, or getting training.
Take a licensed practical nurse, for example. If they were to become a Registered nurse, they could potentially increase their income by nearly $30,000 per year.
According to the U.S. Bureau of Labor Statistics, registered nurses earn roughly $77,600 per year, while licensed practical nurses only earn $48,070.
7. Build Multiple Income Streams
While you should definitely strive to make as much money as possible at your day job, you should also build additional sources of income outside of it.
According to an article by CNBC, 65% of self-made millionaires have three streams of income, 45% have four, and 29% have five or more.
While having several sources of income has helped them reach millionaire status, they also act as a safety net.
For example, if one of their income streams gets hit, they can rely on the others and don’t necessarily have to downgrade their lifestyle.
On the other hand, if someone only has one source of income – their nine-to-five – they could lose everything if they lose their job.
8. Start a Side Hustle
Starting a side hustle is a great way to increase your income streams. By starting a side hustle, you’ll be able to supplement your income and, as a result, have more money to invest each month.
Simply put, a side hustle is any work you do outside of your nine-to-five. It can be anything from in-person work to freelancing to online work.
However, a part-time job isn’t necessarily a side hustle. Side hustles are all about flexibility of when you work. If you have a part-time job, it’s ultimately up to your employer to decide your hours.
There are many great side hustles:
- Start a blog
- Get paid to read books
- Start a YouTube Channel
- Sell crafts online
- Tutor online
- Get paid to walk
- Deliver food and groceries
- Sell products for companies
- Walk dogs
- Get paid to watch video ads
If you’re not interested in starting a side hustle, you can always consider getting a second job.
9. Make Your Money Work for You
Making your money work for you involves building passive income streams.
A passive income stream is any source of income you receive that isn’t directly tied to the number of hours you work per week and requires minimal effort to maintain.
Take an author, for example. While they may put in upfront work to write a book, once they publish it and start selling copies, the money they earn isn’t directly tied to how many hours they work and doesn’t require much effort to maintain.
Many famous authors still make money from books they published years, if not decades ago.
Here are a few ways to create passive income:
- Write an eBook
- Invest in dividend-paying stocks
- Create an online course
- Advertise on your car
- Sell stock photography
- Invest in rental properties
Although these will take time to build momentum, once they do, you’ll be able to make money even while you’re sleeping.
10. Follow Dave Ramsey’s 7 Baby Steps
If you want to reach millionaire status but are currently in a challenging financial situation, I highly recommend you follow Dave Ramsey’s 7 Baby Steps.
The 7 baby steps is a money-management plan all about paying off debt once and for all and building wealth.
The plan involves creating an emergency fund, paying off all your debt except your house, investing for retirement, and ultimately reaching financial independence.
By completing the steps, you’ll be in an excellent position to pursue millionaire status. Any difficulties you currently face with money will be a thing of the past once you’re finished with Ramsey’s baby steps.
11. Practice Stealth Wealth
Simply put, stealth wealth is the practice of being secretly wealthy. Someone who practices stealth wealth hides how much they make and their net worth from others like the public, friends, co-workers, and even their family.
Practicing stealth during your journey to becoming a millionaire will benefit you in countless ways and even help you get there quicker.
One of the reasons some people never reach millionaire status is because they try to keep up with the Joneses.
The second they start making decent money, they feel pressured to buy all the latest gadgets, wear expensive clothing, drive a new car, or even live in a huge house to impress everyone around them.
In other cases, they may fall victim to lifestyle inflation. The major problem with this is that it takes away from how much they’re saving and investing.
If you practice stealth wealth and, as a result, no one knows you’re wealthy, you won’t feel as much of an urge to impress others or give into lifestyle inflation. Instead of spending more because your income increased, you’ll simply invest more, which is how to build real wealth.
12. Lower Your Taxable Income
Taxes are a major expense that most people just ignore. However, there are several ways you can lower your taxable income.
For example, you should max out contributions to your retirement accounts each year. This is one of the easiest ways to take advantage of tax breaks.
There are also taxable brokerage accounts you can use after you max out your 401(k) and IRA. Just remember you will need to pay taxes on earned income from these brokerage accounts the year you receive it.
Depending on your situation, you may want to hire a certified public accountant to help you maximize all possible deductions.
That said, there are many ways to lower your taxable income:
- Adjust your W-4
- Stash money in your 401(k)
- Contribute to a traditional or Roth IRA
- Save for your children’s college education (529 plan)
- Fund your FSA
- Check your eligibility for the EITC
13. Hire a Financial Advisor
Creating a strategy to reach millionaire status in 10 years won’t be easy and maybe even a bit stressful.
Depending on your situation, it may be beneficial to hire a financial advisor. A financial advisor will help you develop a game plan to become a millionaire in 10 years and provide you with expertise every step of the way.
You financial advisor will help you:
- Create a financial plan/wealth-building plan
- Set up a budget
- Manage debt
- Choose investments
- Maximize tax deductions
- Reach your financial goals
- Plan for retirement
- Prepare an estate plan
- And so much more
How Much Do I Have to Save to Become a Millionaire in 10 Years?
To reach millionaire status in 1 decade, you would need to save approximately $8,333.33 per month or $99,999.96 per year.
However, this doesn’t account for the interest you would be earning from the money you invest.
For example, if you earned an 8% annual return on investment, you would need to invest $63,916 per year to become a millionaire in 10 years.
That said, depending on your investment strategy, you may be able to earn much more than an 8% average annual return on your investments.
However, remember there are always risks involved with investing, especially if you have an aggressive approach.
Final Thoughts on Becoming a Millionaire in 10 Years
While you can reach millionaire status in 10 years, it won’t be easy. You’ll need to make several sacrifices, like living well below your means, and you will also need an aggressive savings and investment strategy.
Living well below your means is all about widening the gap between your expenses and income so you have more money to save and invest.
Keep in mind that there are always risks involved with investing, especially with an aggressive approach.
That said, if you want to be a millionaire in 10 years, you’ll also need to work on increasing your income.
To increase your income, you have several options: learn a high-income skill, get training to increase your earning potential, start a side hustle, get a second job, build multiple income streams, and so on.