How To Become A Millionaire: How Even An Average Income Can Lead To A Million Dollars Saved

Earning and saving to reach the milestone of being a millionaire isn’t as unattainable as a lot of people think it is, in fact it’s a very achievable goal.  Most people have the idea in their head that the only people who ever reach that goal are people who are born into wealth, win the lottery, or who have huge real estate empires or successful small businesses.  But the fact is earning a big income doesn’t guarantee that you’ll have a high net worth, and just because you have an average income doesn’t mean you can’t become a millionaire some day.

Today I want to look at how earning and creating a net worth of a million dollars is possible for just about anybody, and how to  go about achieving that goal.

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How Much Do I Need To Save?

He who gathers money little by little makes it grow. Proverbs 13:11

A question that a lot of folks consider is just how much you’ll need to save in order to have a million dollars by the time you retire at 65.   Based on an article over at in order to reach that goal, assuming an 8% return over the years, and with zero dollars currently saved – at these ages you would have to save this much to reach a million by 65.


  • Age 25:  You need to save $286 per month to reach 1 million by age 65
  • Age 35:  You need to save $671 per month to reach 1 million by age 65
  • Age 45:  You need to save $1,698 per month to reach 1 million by age 65
  • Age 55:  You need to save $5,466 per month to reach 1 million by age 65

As you can see, the earlier you start, the better off you’ll be due to the powers of compound interest.   I’m at age 35, and already have some retirement savings put away (not zero like the article assumes), so I should be right on track to reach that million dollar goal.

How You Can Become A Millionaire – Baby Steps

So now we have a rough idea of just how much money you’ll need to be putting away for retirement if you want to reach a 1 million dollar goal.   So the question is, how do you get there?  If you’re not one of the fortunate or highly skilled that are already making huge incomes, here is a strategy for saving up a nice retirement nest egg.

Make Enough Income

The more money you make, the quicker you’ll be able to reach that 1 million dollar goal, but you can retire wealthy on an average income.  Check out the link for some stories of people who did.  But obviously the more you make, the quicker you’ll reach the goal.  How much income you can make may also depend on if you’re single, dual income with no kids – or a couple with kids.  Obviously having dual incomes will help quite a bit (as long as one income doesn’t all go to child care).

If you aren’t even making an average income (in the range of $45-55,000), then you may want to think about trying to better your situation by making proactive decisions to find a better job, continue your education or move into a new career field.  Changing your income and career path may not happen overnight, but in some cases it may be the only way to improve your chances of making more income.

You could also consider taking on a side job.  There are a lot of ways to make money in your spare time, in fact starting a business in your free time is a good way to improve your situation and potentially create a lucrative small business for yourself.

Live On Less Than Your Means Will Allow

We’ve all heard of people who make huge incomes, but then also have expensive tastes and end up spending more money than they’ve made and going into bankruptcy.  The problem is if you have caviar tastes, it’s always possible to outspend your ability to earn.

In his book “Stop Acting Rich“, Thomas J. Stanley talks about how far too often we settle for a life where wealth is only an illusion, and we kill our ability to create real wealth.

Ours is a culture of hyperconsumerism.  Not only can and do we buy nearly anything (except for the truly outrageously expensive), but we seem to have come to believe that we can and should have it all and that who we are is dependent on the ability to live in the right neighborhoods, with appropriately sized homes filled with brand-name appliances, with prestige cars parked in the driveway with expensive golf bags and clubs in the trunk and so on. And so we spend.

You can act rich or actually become rich.  Few of us will ever be able to do both, and we certainly won’t bet rich by acting the part before we have the financial resources with which to pay for la dolce vita.

Stanley goes on to discuss how the truly rich people that he has interviewed are actually very aware of living below their means, and of not overspending.  They appreciate value in the things they buy and aren’t afraid to spend a bit more if it will last longer.  But in the end, they spend well below their means.

Save And Invest Your Money Regularly

While this may seem to be obvious, far too many people don’t save or invest any money on a regular basis.  Too many people live on the edge from paycheck to paycheck, spending until the balance in their account says “zero”, never planning to save and invest their money as a part of their budget.

It’s important to set up a financial plan and a budget in which you’re paying yourself first, putting aside at least 10-15% of your income every month towards your retirement savings – more if you can afford it.

I’m a big proponent of making that savings and investment as automatic as you can, so that it gets to the point where you don’t even notice it every month and your retirement savings slowly grow without too much intervention from you. At our house I have 401k and Roth 401k funds deducted from my paycheck before I even see it every two weeks.  That way I never miss the money – it just goes into the retirement account.  Then we also have automatic savings goals setup with ING where money is automatically deducted at the beginning of the month and transferred to our online savings account.

Once you’ve setup and are saving money regularly in retirement and savings accounts, make sure that you’re getting the best possible return on your money by educating yourself about stocks and bonds, diversifying your holdings and making sure your investments have as low expenses as you can, while still making good returns.  If you’re not a savvy investor, consider getting some professional help.

Wash Rinse Repeat

Once you’ve got a good plan in place, the most important part is to stick with the plan, and keep at it for the long haul.  It isn’t rocket science to save a nice nest egg, but it will take determination and hard work over a long period of time.    Again, the basic steps to creating a million dollar nest egg are:

  • Create income
  • Spend lower than your means
  • Save and invest regularly
  • Repeat

While these steps are of course simplified, and there may be other roadblocks in your path, it really is important to focus on the basic principles sometimes because they can often get lost in the shuffle.

Other things you’ll want to consider to make sure that you don’t short circuit your progress is to have good insurance, save up a good sized emergency fund and always keep an eye on your goals. Of course, never forget to always be generous as well, and never allow a pursuit of wealth or money to become the end goal. Make sure you have goals for wealth building, goals that will leave you happy, not just wanting more.
Are you on track to reach a million dollars by the time you’re 65?  Tell us what you think in the comments.

Last Edited: 14th October 2014

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  1. says

    Great article. It is indeed possible for the average person to retire as a millionaire. The big question is, should you?

    I’ve been reading a book lately called Die Broke by Steven Pollan and Mark Levine . It has really challenged my thinking. I’m not saying I agree with everything I’ve read so far, but it has confirmed for me a few things I have already been thinking.

    Retirement is a fairly new concept. Why do we work hard for 45 years toward this arbitrary goal that was established in a time when on the average people only lived to be 63? Then we suddenly quit working. How about instead we have seasons in our lives where we take some downtime and make some changes, but then continue working until we either are totally unable, or until we die? We live in an information age now not a physical labor age. Take a look at Zig Ziglar. Do you see him retiring at any time?

    I’m currently in one of these periods of my life. My employer of nearly 20 years closed their doors. I’m now trying to restructure my life and determine a new direction doing something I love. And that may change, and I’ll do it again.

    Another factor about having a huge savings. Why leave a large inheritance to your family. In so many cases, it causes nothing but problems. It’s one thing to leave a farm or a business, but just cash? Why not buy them some nice things while they are alive, or take a nice family trip together with the kids and grand kids?

    These are just some interesting concepts I plan on exploring further and incorporating into my Life Plan in one manner or another. I’ll probably do some blogging on it as well. It also looks like there are some newer releases of the book that I may check out. I picked this one up at Goodwill and it is the original 1998 edition. It still makes a lot of since for our current situation though.

    • says

      I don’t think I ever plan on retiring either. I may change careers or do more volunteer type opportunities, but I think I’ll be working in one way or another til I die. I’ve had time off before where I wasn’t working, and at about 3-4 days in I just get bored and antsy.. :)

      My family has a close friend who’s a pastor, and he’s now 100 years old. He’s still writing books (he’s written many books since he turned 80), preaching on occasion, and helping others through volunteer work. I hope to use that as my model..

      • Shan says

        I think part of the reason that retirement is such a big focus for people is that in this country we often work more than 40 hours a week, and have our kids in multiple activities, and spend lots of time connected to a tv or smartphone, and don’t spend much time connecting with friends and family or relaxing. People are exhausted and keep pushing themselves to make it to someday when they will have the time and money to relax. I don’t think that was God’s design. I hope I will be able to retire early someday and do volunteer work, or part-time work, because I definitely can’t continue this pace.

    • says

      I like your seasonal reply, but I still think we should save for the rainy days. I’m planning to leave my day job at some point too and will take some down time. If I don’t have enough saving, then it would be very difficult to leave a steady paycheck.

    • says

      What’s wrong with leaving a legacy and an inheritance for your kids? If you’ve been a good steward and have saved and given then why not leave it for your kids? If you train up your kids properly and instill in them solid financial wisdom then there’s a good chance your kids will honor and take that inheritance to bless others.

      But one thing you could do is put the inheritance in a trust (if it’s a couple of million or something) and let your kids know that if they go stupid while you’re alive they won’t get any of it.

      And if you’re old and rich and can take the whole family on a trip then go for it. That’s part of the blessings of wealth.

  2. says

    The million dollar mark does sound like a lot, but it won’t be nearly as much in 39 years when I’m 65 years old. I think my “number” is more like $2.5M. Yeeeesh. But anyway, you’ve gotta start somewhere, so it’s important to invest what you can as soon as you can!

    • says

      You hit the nail on the head, Kacie. If we could just get every high schooler to graduate understanding that you start investing what you can, as soon as you can, we would be a nation full of millionaires! Time is the single biggest factor in the equation.

  3. says

    It’s the “Make more than you spend” part that seems to trip people up. Often times they can’t make it to the investing part because they can’t manage their cash.

    I’m hopeful, though, that this trend will change.

    Another great one, Pete.

  4. techtikus says

    Nicely said, it is possible to be a millionaire. Hard work and consistency is the key here. I myself deposit a few hundred every month as well as here in Malaysia our salaries are deducted 8% for employees and employers must pay 11% to our employee provident fund (EPF) accounts. Right now I am saving nearly 500 per month and I am 24. If everything goes well, then I am on my way to become a millionaire on an average salary.

  5. says

    Peter, Good article with 4 wise tips and love the millionaire calculator. 95 will be my 65 so starting at 60 will give me 35 years to get to a million. I agree with the other comments that we should continue to work right until the Good Lord takes us home. My wife just recently lost her Grandma (106) and her mind was working until the end. She loved to work those crossword puzzles, read the bible and write encouraging words to the great great grandchildren.

  6. says

    *whew* I’m so relieved to know that I’m on the right track to becoming a millionaire! I’m 25 and I’m maxing out a Roth IRA, which is even more than the suggested $286/month. Hopefully I’ll be a millionaire before I turn 65!

  7. Bilgefisher says

    Paying yourself first is the best way to get started. While I could have the money pulled out automatically, I still take 30% of our paychecks and set it aside the day we each get paid. Your plan to retire at 65 is a good one and will help most people have a comfortable life at that point.

    I think those aware enough to worry about retirement should set their goals higher. I will have my wife and myself retired by 40. Take a proactive approach on retirement and your time will be free to give back while your young and your health stays strong. It saddens me every time I read the company obituaries of guys dead at 60 or younger.

    While 401k’s and Roth IRA’s are a great start, most people can do better than the stock market. Aim higher as the driver of your financial future, not just a passenger going where stocks and 401ks may take you.


  8. says

    Great post! Many people think that they need to earn a 6-figure salary or run a big business to become a millionaire. Definitely not the case! It’s all about living a frugal lifestyle and diligently investing your savings. With time, anyone can become a millionaire and reach financial freedom.

  9. joel says

    Proverb 13:7 is a good one too, which in my mind, relates to frugality.

    “There is one who pretends to be rich, but has nothing; Another pretends to be poor, but has great wealth.”

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