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5 Things to Do in Your 20s to Set Yourself Up to Be a Millionaire

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SteveGuest Blogger
June 04, 2016 · 1.4k Views

How many of you want to be a millionaire?  Most of us probably do, but very few of us achieve that goal.  It doesn't happen overnight.  It takes time and requires discipline.  Becoming a millionaire is possible for most of us, and the earlier we start that process, the easier it gets. Unfortunately, many people fail to get a jumpstart on the steps needed to reach the milestone of being a millionaire.

Here are 5 things to do in your 20s to help you achieve millionaire status later in life:

Source: LinkedIn

1. Decide if you truly want it

Becoming a millionaire is a nice thought, but putting that thought into action is considerably more challenging.  But not challenging because it's "difficult", challenging because it requires many of us to get out of our comfort zones.  If you want to become a millionaire badly enough, it will happen. Becoming a millionaire is an achievable goal for almost any of us - if you start to prioritize "rich habits." Starting these habits in your 20s makes this process much easier.

2. Setup financial automation

The single best way to set yourself up to achieve millions is to make savings automatic from the moment that you score your first job.  Get your 401k established and start contributing to your retirement account through automatic payroll transfers.  Using automation, you never see the money, the savings just happens.  It gets saved into your own retirement account for you, requiring no discipline on your part aside from the initial effort to set it up.  If your employer matches a certain percentage of your salary, devote at least that much, but try to max it out (as of 2016, traditional 401ks are capped at $18,000 a year).  Not only will maxing out your 401k build wealth more quickly, but it will also reduce your taxable income, lowering your legal responsibility to Uncle Sam.  Who doesn't like paying fewer taxes?

3. Live below your means

I get it - you've worked your butt off in high school and perhaps college.  Now you're working and pulling down some money.  Naturally, you want to enjoy it.  I did too, but remember, your future millions depend on your present day savings.  Living below your means in your 20s builds the foundation for future riches while you are young.  I made the mistake of living above my means for many years after college, destroying my chances at achieving that glorious 7-figure money mark for years.  All those cars, nights out, and spending tons of money on hobbies and other forms of entertainment that I thought made me happy, drained my wallet of cash.  Some of it was fun at the time, but none of it actively contributed to the quality of my life, and it definitely delayed my ability to call myself a millionaire. I wish I lived more frugally when I was younger.

4. Resist debts as much as possible (especially automotive!)

Debts are the biggest contributors to people's failure to achieve serious wealth, and your 20s is when most of us first begin to buy cars.  The easy availability of credit encourages overspending under the guise of paying things off over time.  The problem is the more we pay off over time, the less we have to save, and the less that we have to save, the longer it will take for us to achieve millionaire status.  Cars, especially when purchased new, may be the biggest killer of wealth.  New cars depreciate at least 10% the instant they are driven off the lot.  Rather than going into debt to buy a new car, look for cars that are three to four years old, which marks the point where cars depreciate the most but still have a substantial number of reliable driving years left on the motor and transmission.  It is the sweet spot of automotive purchasing.  Start developing good car buying habits while you're young and watch how much faster your wealth will grow.  

5. Do not fall prey to lifestyle inflation

It is easy to let your lifestyle inflate as you begin to earn more money throughout your career.  The problem is if you let your spending inflate as your earnings increase, you never get ahead, and you fall into the trap of NEEDING that extra money to pay for your ever-increasing lifestyle. Rather than spending your bonus money or salary increases, celebrate responsibly (ie: a dinner out) and save as much as possible. After all, if you pull down $100,000 a year but only live like you make $50,000, it won't take long for your net worth to skyrocket, and best of all, you may even get to retire much earlier than you expected.

The most important key to achieving millionaire status is to start young. Developing healthy saving habits and living below your means in our 20s positions us to financially kill it. Start young, stay consistent, and you will be able to call yourself a millionaire in no time.


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Steve is a personal finance blogger with a goal of retiring from full time corporate work by 35. Steve can be reached on his personal blog at

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