4 tips from financial planners to become a millionaire
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Recently, I’ve become obsessed with making sure I’m doing what I can to increase my net worth. After many years of making a ton of mistakes with my finances — from having no retirement funds to saving very little from my paycheck — I vowed to spend my 30s doing things differently.
Now that I have a solid foundation for managing my money on a monthly basis, I want to know what other steps I can take to ensure my money continues to grow in the years to come. That’s why I asked three financial planners to share the best advice they have for those trying to reach millionaire status in 10 years or less.
1. Spend less than you earn
While it might be easier said than done, sticking to a savings and spending plan can be a game changer in your finances.
Financial planner Scott Turner recommends starting by making sure you’re spending less than you’re earning.
“You can’t earn more than bad spending habits. You can earn $1 million a year, but if you’re spending $1.1 million every year, it doesn’t matter – you’re still broke “, says Turner. “Choose a percentage of money to save each paycheck and do your best to be consistent.”
2. Prioritize paying off your debts
If your goal is to increase your net worth and hit the seven-figure mark, financial planner Jay Zigmont says it’s necessary to prioritize paying off your debt.
“Debt steals your future,” Zigmont said. “Pay off all your consumer debt and eliminate debt as an option in your life.”
3. Maximize tax savings
As you build your financial portfolio, financial planner Katherine Fox recommends choosing the right accounts to maximize tax savings.
“Or your savings are just as important as the amount you save,” Fox said. “Focus first on the maximum of all tax-deferred accounts.
Tax-deferred accounts include things like an IRA or Roth IRA, 401(k) and 403(b) plans, and health savings accounts (HSAs).
“Once you’ve maximized contributions to all of these accounts based on your age and income level, open and begin funding a taxable brokerage account with any additional savings,” Fox added.
4. Believe you can do it
While it may sound cliché, Turner says making sure you have a solid mindset is key to growing your money and becoming a millionaire.
“It’s the most underrated piece of advice,” Turner said. “People who don’t believe in themselves can end up self-sabotaging their finances.”
He added that people who believe in themselves tend to seek out better advice and mentors, and associate with people who have similar goals, which can help you stick to your financial plans.
“When you think you can, you’re much more likely to make the right decisions to achieve your goal of joining the double-point club,” Turner said.