Want to be a Millionaire?

We recently marked ‘National Be a Millionaire Day’ – undoubtedly a day for those who are not yet millionaires to dream of becoming so someday. Nevertheless, it’s also a good opportunity to reflect on the necessary steps to turn those dreams into reality. It all starts with organizing your financial plan for the future.

There are more millionaires in the United States today than ever before. In fact, one out of every 20 Americans can now claim the title – that’s 15.3 million millionaires. Significant factors contributing to the rise in number of millionaires today include a strong stock market, robust economic conditions and a sturdy business environment.

Traditionally, being a millionaire meant having a net worth of more than $1 million. Now, in some cases, a millionaire is defined as someone making more than $1 million per year. Even though some would argue that $1 million today isn’t what it used to be, it’s still a significant marker of financial wealth.

Millionaires typically make smart decisions about their money and are able to enjoy a comfortable retirement, take care of their family, pay their bills, educate their children and grandchildren, and design the life they desire. 

How does one become a millionaire? Most importantly, save and save some more! Never underestimate the power of compound interest.

For example, if you invested $2,800 each year (approximately $233 each month) and earned a 9 percent rate of return, you would have a million dollars in 40 years. Want to accelerate that? Plan to save as much as you reasonable can.

It’s also important to have a written financial plan, spend less than you make, use credit only when necessary, and finally, lean on professional help or expertise to help guide your financial decisions.

Other prudent financial habits that most millionaires endeavor to abide by include:

• Strive to preserve wealth everyday
• Be entrepreneurial and look for ways to bring in extra income
• Mitigate taxes where possible
• Have a written plan to take care of your heirs
• Have a plan to make sure your assets cannot be unjustly taken
• Consider charitable giving

Building wealth takes diligence and hard work but following these basic guidelines can help put you on the road to becoming a millionaire yourself.

Rob McAllister is a financial advisor with the Global Wealth Management Division of Morgan Stanley in Boulder. He can be reached at 856-696-7429 or email him at [email protected].