Our question of the month comes in from Whitney from California:
I’ve been enjoying your show for the past few months. Your message of financial empowerment is really motivating me lately to clean up my family’s debt and grow our wealth.
I have a question that I think could be fun for you and informative for me.
With all of the millionaires you’ve had on your show, what are the top three things you’ve learned so far? I’m in my early 30’s and I’d love to become a millionaire before I’m 40.
Keep up the excellent work on the podcast, Andy!
Thanks for writing in Whitney. I love this question …
When I started the podcast, I never thought I’d be able to learn as much as I have. This is now the 85th episode of the Marriage, Kids and Money Podcast and loosely I’ve interviewed and been inspired by around 80-100 money geniuses so far. That’s between the Money Masters of the Week, our weekly guests and some stellar interviews that are yet to be released.
As far as millionaires though:
- I’ve only had a chance to interview less than 10.
- It's closer to 5 total for millionaires who've openly shared their net worth.
- And millionaires in their 30’s, the number decreases to 3. Perfect for your question!
Let’s go through the 3 major lessons that I learned from the inspiring 30-something millionaires I’ve interviewed.
What I Learned from 3 Interviews with Millionaires in their 30's
1. Keep Investing Simple (Scott Alan Turner)
Listen to the Interview: Investing Made Simple – with Scott Alan Turner
This self-made millionaire helped me to understand that investing does not have to be complicated. No day trading, no individual stock picking, no fancy annuities … if it’s not simple and you don’t understand it, stay away from it.
Scott recommended investing in low-cost index funds through companies like Vanguard. This recommended passive investing option is not only less complicated than active investing, there is now proof that it performs better. In 2007, Warren Buffett made a $1 Million bet with some big hedge funds that passive index fund investing would beat out their active investing over a 10 year period.
Guess who won?
Warren Buffett and the charity “Girls Inc.” that he gave the money to.
Index Funds also help you to keep your fees extremely low. They are well-known for having fees that are 80 or 90% lower than the typical mutual fund.
And since index mutual funds mirror major market indices like the S&P 500, your portfolio will be diversified.
So … do as Millionaire Scott Alan Turner does and Keep Investing Simple!
2. Create Multiple Income Streams (Grant Sabatier)
Listen to the Interview: How to Become a Millionaire by 30 – with Grant Sabatier
How to Become a Millionaire by 30 – with Grant Sabatier https://t.co/MMhCEfwT67
— Andy Hill (@AndyHillMKM) May 22, 2018
Grant’s story is incredible. In short, he became a millionaire before his 30th birthday … no inheritance, no free ride and starting with a balance in his bank account of just $2.26.
I learned a lot from our interview last summer, but the main lesson that stuck out to me was how he grew his wealth by diversifying his income.
- He had a full-time job in digital marketing making $50,000 per year.
- Website building and freelance digital marketing services became his side hustle of choice. This grew his annual income to $400,000!
- Grant also began investing in (you guessed it!) passive index funds.
- He grew another income stream through blogging and so on and so on … voila, Millionaire!
This income stream diversification became a lifelong practice for Grant and has served him well.
And a REALLY great bonus of this approach is that if for some reason one of your income streams dries up, you’re supported by the other ones!
So … do as Millionaire Grant Sabatier does and Create Multiple Streams of Income!
3. Build Your Career and Salary (Liz, the Chief Mom Officer)
Listen to the Interview: How to Increase Your Salary and Become a Millionaire in Your 30's – with Liz, the Chief Mom Officer
— Andy Hill (@AndyHillMKM) May 14, 2018
I’m always motivated by exciting stories about entrepreneurs who went out on their own and built some incredible company, service or product that people love. It’s alluring and I always thought that I had to do something that to build wealth.
Liz helped me to think twice about that notion.
You can become a millionaire by growing your salary and your career right where you are. You don’t need to invent the next mind-blowing app or become the next Steve Jobs – you can build wealth by working hard, providing value and exceeding expectations at your job.
Investing and diversifying your income streams help too, but your day-job can be a HUGE help as well.
Over the course of your career, you have the ability to earn millions upon millions of dollars. If you put that money to work for you, that’s how you become a millionaire.
The point here (or the epiphany for me at least) is that your career can be your greatest wealth builder. Use it and grow it.
So … do as Millionaire Liz does and Build Your Career and Salary!
This was a fun question, Whitney! I’ll have to catch up with some more millionaires on the show soon so we can all learn and build our wealth too.
Money Master of the Week
Drew from Virginia connected with me on Twitter to share a huge net worth Win. In the last year, he and his wife have increased their net worth by $192,600!
When Drew and his wife got married, their net worth was $243k and now just one year later they are at $436k.
The majority of this net worth growth came from taking advantage of tax-deferred retirement vehicles like 401ks, IRAs or in his case his Solo 401k from his side business.
After reading more on his blog, Drew is hitting ALL of the lessons we just spoke about with Whitney:
- Keeping his retirement investing simple with index funds
- Diversifying his income streams with his side hustle
- Growing his salary at work
When you combine this with his wife’s efforts, you get a couple that will be millionaires in NO time!
Drew from Virginia is our Money Master of the Week!
You can follow Drew and learn about his part to wealth building at FI Introvert.
If you have a financial victory you want to share on this show, please leave me a voicemail (or email) and include the following: name, location, your big win, how you did it and your plans for the future.
Your story will inspire others to save more, make more and plan for their family’s future.
MKM Challenge: Track Your Net Worth
Your net worth is a gauge for your financial health. As your net worth grows so does your freedom.
I challenge you to start tracking your net worth and set a goal for 1 year, 5 years and 10 years.
I’m joining in as well. I’ve been tracking my net worth and using this platform to motivate me to grow it. Self-proclamation encourages me to hit my goals.
To begin the challenge, let’s first define “Net Worth” because I didn’t know what it meant when I started tracking mine.
What is Net Worth?
Net worth is calculated by adding up what you own (your assets) and subtracting what you owe (your liabilities).
Your assets could include:
- Cash savings
- Retirement savings
Your liabilities could include:
- Student loan
- Car debt
- Personal loans
For example, if you have:
- $300,000 in assets
- $100,000 in liabilities
Your net worth is $200,000.
Or in my case, when I started tracking in 2010, we had around $150,000 in assets and $200,000 in liabilities. Our net worth was a -$50,000 net worth.
When Nicole and I first got together in 2010, we had a combined net worth of -$50,000. (Yes, that’s a negative symbol.) Lots of debt from Andy 🤦♂️
Here’s how we clawed our way into positive territory and beyond.https://t.co/rGwUisJtPR
— Andy Hill (@AndyHillMKM) February 16, 2018
Related Post: How to Increase Your Net Worth by $700,000 in 7 Years
How Do I Track My Net Worth?
Tracking your net worth can be done easily on a personal spreadsheet. Periodically, you calculate your numbers and find out where you stand.
Or you could use my favorite net worth tracking tool Personal Capital. This application is free and really intuitive. You sync up all of your accounts and Personal Capital tracks your net worth for you.
What’s a Good Net Worth Goal to Set?
That is completely up to you. When I make goals, I like to make them SMART goals – Specific, Measurable, Attainable, Relevant and Time-Based.
Let’s not just say “I want to become a millionaire!” Instead, let’s say … “I want to have a million dollar net worth by the time I turn 45 years old.”
My end of year goal is $800,000, my 5-year goal is $1.1 million and my 10-year goal is $1.5 million.
There are some folks that listen to this show that are in the multi-million dollar net worth range and there are some that are in the negative net worth range. No matter where you are, set a goal today to improve your position. The more wealth you build, the more secure your family is and the more you’ll be able to pursue your true passions in life.
What actions can I take to improve my net worth?
Here are 7 actions you can do to increase your net worth:
- Practice living on a budget and monitoring your money each month (Tiller is excellent for people who love spreadsheets)
- Pay off your credit debt as fast as possible and pay off your balance every month going forward
- Lower your fees in your 401k or IRA using a service like Blooom or Personal Capital Fee Analyzer feature
- Decrease your living expenses and save more
- Get clear with your supervisor about what your objectives are for the year and exceed them. A proven record of success at your job is the best way to score your next raise.
- Start an income-producing side hustle that brings you joy and cash
- Reduce your tax burden by taking advantage of tax-advantaged retirement accounts like Drew did (401k, IRA, Solo 401k, HSA, SEP-IRA, etc)
That’s it. Let’s get it done my friends. You have the knowledge, you have the FREE online tools to help you track it through Personal Capital … all you need now is the WHY.
Why Should I Want to Become a Millionaire or Grow My Net Worth?
This is the best question to ask yourself.
For me, I want to become a millionaire because I truly believe that as I grow my wealth, I will grow my time freedom. I will be able to do more of what I want when I want to and with whom I want. Being there for my kids as they grow is at the top of my list. Contributing to work and causes that truly bring me joy regardless of the pay would be freeing.
Honestly, whether you have a one million, two million or even just a $2,000 net worth, they’re just numbers. They mean nothing until you give them meaning.
Dream statements are much more compelling because they’re personally moving:
- “When I’m a millionaire, my stress level will decrease because I know my kids are provided for.”
- “When I reach a $500,000 net worth, I will have a debt free life and owe zero payments to anyone.”
- “At the $2 million dollar level, I will be able to start a scholarship for kids who need a shot at college. That’ll make me feel like I’m truly contributing to society.”
Find your motivating objective and tie it to your numeric net worth goal. It’ll drive you to success even faster.
So that’s it! The challenge has been laid down! Who is in?!
Support this Show
If you enjoyed this podcast episode, here are some excellent ways to support the show:
- Leave a review for the show on Apple Podcasts or Stitcher
- Leave a comment below
- Check out my Recommended Resources Page
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I truly appreciate the support everyone!
I’d love to hear from you!
If you’d like your question featured on the show, reach out and let me know. It would be my honor to support you in your journey toward financial freedom.
Carpe Diem Quote
“Before you can become a millionaire, you must learn to think like one. You must learn how to motivate yourself to counter fear with courage.”
—Thomas J. Stanley
What do you think it takes to become a millionaire?
Please let me know in the comments below!