How to Earn Your First Million

All three of us were able to earn our money through a powerful combination of two things:

  1. Investing and saving
  2. Earning more money through side hustles

Though you can actually make a million dollars on investing and saving alone, you can watch your net worth explode if you combine them both — which I suggest you do.


Invest Early

Getting rich can be a matter of mathematics. It’s well documented that investing in the stock market over many years, reinvesting your dividends and letting that money grow and compound can make you a millionaire. But it’s also a matter of knowing how much to invest, in what types of mutual funds and for how long. You can find out how much you need to invest, for how long and at what return with a simple calculator. Todd Tresidder, former hedge fund manager and owner of wealth-building website Financial Mentor, developed a calculator to help with this. For example, you can calculate that if you invest $500 per month in a diversified stock market index fund — such as the Fidelity Total Market Index Fund — and earn an average 7 percent return — assuming a 2 percent inflation rate — you will be a millionaire in 36 years. If Henry starts at age 25, by age 61, he’ll be a millionaire. If he starts later, he’ll need to save and invest more. If Henry chooses lower-return investments, such as money market funds or certificates of deposit (CD), he’ll have to save thousands of dollars more to compensate for those investments’ lower annual rates of return.

4. Control Your Spending

The stereotypical image of a millionaire is somebo

The stereotypical image of a millionaire is somebody with their own yacht, who takes chartered flights to exotic locations, and has several luxury cars lined up outside their palatial home.

Now, that might be how most billionaires live, but that’s not the lifestyle of your average millionaire.

In fact, they’re the ones quietly driving a beat-up car, living in a modest home, and who save extra money budgeting for everything.

You might even think of some people with millionaire status as being miserly — a bit of a Scrooge McDuck — but the truth is they truly understand the value of money.

They understand that tiny changes in spending habits can have a huge impact on their financial future.

It may sound obvious but people who become rich and stay rich know how to save money and avoid putting money into frivolous things. 

So, how much debt are you comfortable having?

Because taking on a small mountain of unsecured debt, because you want immediate gratification with a big house, expensive vacations and nice cars, is the quickest route to bankruptcy before you’re 40.

The flipside of the above approach is you don’t need to live on Ramen noodles and beans for the next five years if you want to make a million dollars.

It just means using a bit more common sense when it comes to spending.

It means avoiding expensive personal finance deals on cars, vacationing “at home,” cooking your own meals instead of eating out, and basically behaving like an adult who doesn’t want to spend the rest of their life paying off credit card debt and student loan debt.

Wealth building is all about reaching financial freedom.

Dave Ramsey’s YouTube channel is an absolute treasure trove of free financial advice, from an actual multi-millionaire, and not just somebody who has theories on how you should manage your finances.

Dave is more of a long-term investment planner, so he won’t have advice on how to become a millionaire within the next five years.

But he will change how you view your income and expenditure.

Even if you can’t spare the time to learn more with personal finance podcasts (because you’re too busy being broke?), here’s one takeaway you can live by…

Millionaires never, ever overspend.

4. Eliminate High-Interest Credit Card Debt

While debt isn’t a bad thing on its own, high-interest debt can inhibit your ability to build wealth. If you’re carrying a balance on a credit card with an annual percentage rate (APR) higher than about 8%, one of the best investments you can make is paying it down ASAP. That’s because it’s unlikely any investment will pay returns as high as what you’re paying your lender in interest.

If you prioritize eliminating this debt now, you’ll save money on interest and have more to save for retirement in the long run. But that doesn’t mean you shouldn’t save anything until you’ve paid off your debt in full. Generally speaking, you should prioritize creating a basic emergency fund before putting extra income towards debt repayment. Otherwise, you could end up back in debt the next time there’s an emergency.

But once you’ve ticked those boxes, prioritize paying down high-interest debt. You can also consolidate credit card debt with a low-APR personal loan, or use a balance transfer credit card with a 0% APR introductory period.

Keep Your Investments Secured

Cybersecurity is one of the biggest threats to companies and financial institutions. And while the average investor probably isn’t thinking about things like encryption, it’s important to take steps to make sure your investments are secured. That’s why we recommend using a VPN like NordVPN when you buy stocks or invest with a broker.

A VPN masks your identity online, making it harder for hackers to find you and identify your transactions. Ofcourse you should also use a broker that has an encrypted website, but using a VPN like  ExpressVPN can add an extra layer of security. 

How To Make a Million Dollars: Start With Bite-Sized Goals

It’s a great idea to break a larger goal into smaller chunks. After all, how do you go about eating an elephant?

One bite at a time, folks!

First-time marathon runners don’t wake up one morning, strap on a pair of sneakers, and run 26.219 miles on their first attempt.

Instead, they establish a training plan, repeatedly running shorter distances until they achieve their goal.

Earning $1,000,000 is achieved using the same methodology.

An income goal of five years is not so close that it terrifies you into inaction, but also not so far away that you can conveniently ignore it.

Setting a time frame around your goal makes you accountable to it, and that’s the only way to achieve real success in anything you do.

But before we go any further, look back at the last five years of your life.

What have you achieved?

What would you do differently?

How would it have felt to have tackled any of the challenges you faced with $1 million sitting in your checking account?

Start With $10 Million

“Start with $10 million” is actually a joke, and it reflects how our brains tend to trick us into doing the wrong thing when investing. The best way to circumvent our “inferior mental angels” is to learn about investing, create a plan and stick with it. Our psychology often works against us, said Kirk Chisholm, principal at Innovative Advisory Group. It’s not difficult to make a million with investing — if you start young enough and avoid psychological pitfalls, such as following the crowd. Avoid trading in and out of your investments. Create a sound investing plan, invest through thick and thin, and over time you can become a millionaire. Those who buy and sell more frequently tend to underperform compared to those who buy and hold, according to Vanguard Research.

Invest Early and Often

  • The best time to start investing is now. The numbers show that a 21-year-old who invests for 10 to 15 years for a lower amount can outperform someone who starts investing heavily at 45. The idea is that you want to give our friend compound interest the time to work its magic.

Index Funds

  • Invest in low-cost index funds. They can be ETFs or mutual funds. Compare their expense ratios and average annual returns using a site like Morningstar. For Nancy, I assumed an average annual rate of return of 7%. 
  • First invest in tax-efficient accounts, like 401(k)s, IRAs, or HSAs, before using normal brokerage accounts

I would love to learn more about what you think. Send me an email at if you have any questions or doubts. Meanwhile, check out the following hashtags #debtfreecommunity #FIRE #FIREjourney and be empowered by all the amazing goals these communities are accomplishing across the socials.

8. Earn Income on the Side

James Foster

James Foster

A part-time job or side gig courtesy of the sharing economy could be the ticket to generating some extra cash. If you invest the money or use it to, say, help you buy a house, you’ll get closer to your $1 million goal.

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Danielle and Joe Haymes of Houston found a side gig they love two years ago after searching for a place to board their two dachshunds. Danielle is a technology instructor for a local school district and Joe is a sales manager, but they decided to become dog sitters on the side after learning about DogVacay, which matches pet sitters with dog owners. The Haymeses usually take in three to four dogs at a time, depending on their schedules. In 2015, they earned about $13,000; the year before, they earned about $12,000. (Sitters set their own rates and pay 20% to DogVacay.) That income alone might not make them millionaires, but they’re planning to use it as leverage to reach a larger goal: They have saved most of the money as a down payment on their dream house in a neighborhood with a great school district.

6. Dont Sell Yourself Short

Some individuals are extremely loyal to their employers and will stay with them for years without seeing their incomes take a jump. This can be a mistake, as increasing your income is an excellent way to boost your rate of saving.

Always keep your eye out for other opportunities and try not to sell yourself short. Work hard and find an employer who will compensate you for your work ethic, skills, and experience.

How Much Does $1 Million Payout?

The following table will provide an estimate of how much guaranteed income a $1,000,000 annuity will payout, annually, for the rest of a person’s life.

AgeImmediatelyIn 5 YearsIn 10 yearsIn 20 Years

Learn About Sales and Marketing

Selling is everything in business, and marketing gets the right audience to the salespeople. A business could hardly become successful without being good at sales. That’s why you need to learn more about sales and marketing, which is a continuous learning process in the middle of a constantly changing business landscape.

You don’t have to be an expert to beat the big dogs in the industry. You just need to learn the tricks of the trade to put up a working strategy that sells. There’s always a way to sell without being salesy, and only you can find that out through studying and learning, having a mentor, and joining sales training and seminars. 

Millionaire By 30 Money Mindset

If you want to become a millionaire by 30, you must adopt a strong money mindset. Know that there is money everywhere for the taking. You’ve got to believe you deserve to be rich.

Further, becoming a millionaire by 30 is becoming more common rather than the exception thanks to inflation. After all, $3 million is the new $1 million today.

There are so many standard ways to become a millionaire. If you don’t become a millionaire by 30, you will eventually get there with enough time.

If you work for 40 years and save and invest just 20% of your after-tax paycheck a year, there is no doubt in my mind you will amass at least one million dollars. Compounding is a powerful force.

Maxing out your 401K for 30+ years will also most likely lead to over $1 million dollars as well. Historical stock and bond market returns plus company match are on your side.

We’ve got financial planners, personal finance blogs, television, books and even free financial tools to help you build and track your wealth. So many resources make building wealth much easier now than in the past. Let’s look at three reasons why becoming a millionaire by 30 is easier than ever before.

6. Don’t Tap Into Your Savings Early

While it may be tempting to tap into your 401(k) or IRA in a moment of financial hardship, dipping into your retirement account may have long-term financial drawbacks that can be severe.

Not only does withdrawing from your retirement savings early counteract your savings efforts, but steep early withdrawal penalties potentially make accessing your cash before retirement all the more destructive. If you cash out your funds from a 401(k) or traditional IRA before age 59½, you could face a 10% penalty. In addition, you’ll also have to pay income taxes on the money you withdraw.

Avoid borrowing against your retirement by building an emergency fund. Aim for emergency savings to cover at least three to six months of necessary expenses.

Keeping Up With Inflation

Some annuities offer a guaranteed lifetime income with the ability to increase regularly to keep up with inflation. Once the income increases, the payment amount is locked in and can never go backward from that point forward.


A 40-year-old purchases a $1,000,000 annuity with a lifetime income rider to retire at age 60. At age 60, the lifetime income amount may be guaranteed $105,380 initially but hypothetically increases to $288,439 by age 67. Once the income has increased to $288,439 annually, this payment is locked in and can never go below $288,439 in the future.

On the other hand, a performance-based annuity may hypothetically generate an income of $381,349 a year for life starting at age 60, increasing to $636,610 a year by age 70. Once the income has increased to $636,610 annually, this payment is locked in and can never go below $636,610 in the future.

Keep Aggressively Saving And Investing

Years later, I’ve continued to grow my net worth with a variety of passive and alternative active incomes. My family is a great motivator to keep on going. The last thing my wife and I want to do is go back to work while our children are still young.

If you’ve been reading my posts from how to save for retirement and how to properly invest for your future, there’s no magic behind wealth accumulation.

Amassing wealth is about savings, discipline, perseverance, luck, an X Factor, and the belief that you too deserve to be wealthy. Eventually you will have more than enough so that you’ll either retire or keep on playing for fun.

After leaving the work force for good at the age of 34 in 2012, I decided to keep on playing by building Financial Samurai into the best possible personal finance blog I could. When people tell me I’m lucky, I agree! As a result, I’ve tried to re-create my luck by writing 3-4X a week every year since 2009.

After 11+ years of writing on Financial Samurai, I believe one important secret to wealth and success is grit. If you can demonstrate unwavering commitment with one thing for at least 10 years, I strongly believe you will succeed. Too many people quit way too soon or right before the going gets good. Stay committed!

If I started this site in my early 20s, I would have become a millionaire by 30. If you are young, please take advantage of your youth.

5. Own a Home

Derek and Lauren Ross didn’t buy their home in Oak Park, Calif., because they thought it would make them rich. They bought it because the community of 14,000, about 40 miles from Los Angeles, has some of the best schools in California, plus lots of parks and open space. Nonetheless, their investment has paid off. They bought their two-story home in 2002 for about $542,000. Today it’s worth more than $800,000, Derek estimates.

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Step 4: Find a million-dollar business idea (it’s easier than you think)

One very common misconception about starting your own freelance hustle is that you need to come up with the “perfect” idea to do it — when that couldn’t be further from the case.

I know it’s difficult to imagine that you might have profitable skills already — but you do. In fact, Shannon has a perfect solution to find out those skills: Look at what your friends ask you to help them out with. That’s how she got her start as a freelance CPA consultant.

From Shannon:

“I had a colleague who needed help sorting through her finances. She asked me to help her out, and she became my first client. Then I had another friend who started a law office and needed help, so I helped them out with all of their accounting. I’d meet with them to make sure that they were still compliant and help with their tax returns.

It just started with helping people as a hobby, but then my husband pointed out that I was getting clients without even trying. Eventually, I was able to start a freelancing business from it.”

Sometimes it’s just a matter of trial and error like it was for Erik. He says:

“Before freelancing, I was at a large tech company, and regularly tried my hand at little entrepreneurial side-projects. Come to think of it, I’ve attempted to sell made-to-measure men’s suits, novelty wall clocks, coaching, and both product and digital design services. But nothing really stuck until Learn UI Design.”

Spend about 10 – 20 minutes now writing down five skills that you already have and could charge money for. Once you’re done, congratulations — you now have 5 potential business ideas that you can grow into a flourishing side hustle.

For now, just choose one business idea. It’s okay, you can always change it later. For now, we’re going to just try one out and try to find a client with it.

Need to find a way to earn money without leaving your house? Check out my free List of 30 Proven Business Ideas to find the perfect opportunity for your lifestyle.

Hustle and Hustle More

No one is going to hand you a million dollars. You have to hustle and be consistent. It took me a few years of constantly working 14 hours every day until my business partner and I generated our first seven-figure earnings. Today, I can leverage my time and money to create greater products and live my lifestyle at the next level. 

So keep on hustling and hustle more every day until you are already making your first million dollars of earnings. But remember — you can only hustle more if you are passionate about what you are doing. And after days of hustling, make sure you take some time to recharge — you need rest in order to be productive!

4. Own Your Home

Many of us rent a home or an apartment because we cannot afford to purchase a home, or because we aren’t sure where we want to live for the long term. And that’s fine. However, renting is often not a good long-term investment because buying a home is a good way to build equity.

Unless you intend to move in a short period of time, it generally makes sense to consider putting a down payment on a home. At least this way, over time, you can build up some equity and the foundation for a nest egg.

8. Start a business on Amazon

"I would invest $100 in business education. Start with free online content from proven business leaders, then read every book you can get from the ones that resonate with you.

Next, find a product that you can buy on for 10% to 30% of what you can sell it for on Amazon. To find products that sell well, look for those with a 'Best Sellers Rank' between one and 5,000 in the high-level categories.

Save, hustle or borrow to get another $500 to buy your inventory. Try different marketing strategies to sell the product — starting with social media, online advertising and content marketing. Then stop doing what isn't working and start doing what is working.

To grow your business, focus on increasing the profit margin and the quantity you sell. Eventually, you want to own the brand so you have a valuable asset that produces wealth."

Matt Clark, co-founder and chairman of and co-creator of Amazing Selling Machine. Follow Matt on Instagram.


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