How to become a Millionaire (just in case you wanted to know)

This ariticle is from Frugal dad it is worth reading and tells us how to become a millianire. Just think..what if we taught our children to follow this plan even if they had some set backs they would still acheive wealth.

This is frugal dads 10 year plan:

Imagine in just ten years you could have one million dollars socked away in a high-yield savings account, spinning off enough interest to live comfortably for the rest of your life. Short of hitting the lottery or receiving a lofty inheritance from a long-lost uncle, this might seem an impossible goal. Well, it nearly is, given the short time frame. However, if you are willing to make an incredible sacrifice, and catch a nice wave from a rebounding market, you just might enjoy becoming a millionaire in less than a decade.

$996 a Week for 10 Years
That is roughly the amount you would have to invest to save one million dollars in ten years, assuming an average 12% earnings rate. Historically, 12% is a realistic figure, albeit optimistically on the high side. Here is a look at how your $996 weekly contributions to your favorite investment account would add up each year:


source: DinkyTown.net

Carving Out $996 a Week
I nearly laughed out loud when I typed that heading. I often read topics like “carving out $50 a month” or “shaving $20 off weekly expenses,” but rarely do we hear someone suggest “carving out $996 a week!” That is nearly $4,000 a month! If you are like me, that is more than I have to carve! So how does the average person go about contributing nearly $1,000 a week to savings? Using the principles discussed in books like I Will Teach You To Be Rich, you can discover ways to cut your expenses significantly while boosting your income.

Get a Side Hustle
A reader once wrote in that a friend told him “everyone needs a side hustle,” something to supplement their full time job. That’s great advice! It could be a small, home-based business opportunity that generates a few hundred dollars a month, an investment opportunity with a great passive income, such as peer-to-peer lending, or a substantial part-time career that you can cultivate in your off hours.

Either way, this “side hustle” could represent the majority of that $996 you have to come up with to make a million dollars in ten years. Obviously, some of the profits from this side gig will have to be reinvested to help it grow, but for the most part, your goal should be to try to save as much of those profits as possible.

Pay Off the Mortgage Early
If you have a $1,000 mortgage payment, paying it off early buys you one week’s worth of savings each month towards your millionaire dream. Eliminating a $2,000 mortgage provides two weeks. Pay off the mortgage early, and instead of sending a payment to the bank each month, send a deposit in that same amount. This step alone will put you on the fast track to building significant wealth.

Two Income Households-Save One, Spend One
In households with two working spouses, make an effort to live on one income and invest the other. Open a high-interest online savings account at one of the best online banks, and point one spouse’s direct deposit there. All further investments, such as transfers to a top online brokerage can be automatically deducted from that account.

If one spouse brings home $4,000 a month you just found the source for your $996 a week contributions. Living on one income may require downsizing homes and cars, and living way below your means, but the payoff is well worth it in the long run. Invest some of this money in equities, either in single stocks or in broader mutual funds. Sign up for a quality online brokerage such as Zecco (check out Zecco Trading – $0 Trades offer) to put a little bit of those saving to work for you.

I don’t mean to trivialize the amount of sacrifice (and luck) required to make this plan work. $996 is a significant amount of money, and at this phase in my life I could barely afford to contribute half that amount on a weekly basis. But it is a goal–something to strive for.

It is also important to point out that there is nothing magical about the one million dollar mark. You may find that you could live quite comfortably on the interest generated from $750,000, or even $600,000. Your “number” is a personal choice, but figuring out how to make a million .dollars provides most of us a stretch goal.

My Take on the Houshold Budget AKA Spending plan

I believe deep down we would all like to have wealth. From my friends seven year old who says when I grow up I want to be rich. To us adults who would like to have enough money to have all of our needs met. The secret that noboby tells us til it is too late is that no matter how much you make you can always spend it. When I was younger and I got my first w2 in January from my employer and it said I made 18,000 dollars that year and I didn’t even save a dime. I vowed to do better and many years later I study money and how it works for my hobby. I am love to tell others all the money secrets I find along the way. I think it is a shame that we are not teaching our youth how to achieve wealth in there lifetimes. Another secret is to start young but what if they forgot to tell us till we are older. We teach nothing about how to handle money in our school Systems. Yet we are the richest nation on earth.


Building your house of wealth

Your foundation is to live within your income, stay out of debt, learn to keep your money and learn how to have it work for you.

To learn to stay within your income you need to have a budget, the new term is a spending plan.

Everything in your spending plan needs to fit in your take home income.


If it doesn’t you are in danger of going into debt to make up the difference and debt takes you money away from you and then your money can’t work for you.. It is working for them.

After writing your spending plan make sure it fits within your take home income it has to fit either by lowering your bills or you need to make more income. You may have to 2nd job to fill in the gap.

Then once you have a spending plan tweak it you might find some hidden money call all insurance companies and make sure you are not paying too much for your services. Companies will lower rates but do not tell their current customers about the changes it is kind of like if we don’t ask they don’t tell.

At least once a year we should dissect your budget to make sure you are not paying more than you need to for the same services.

On my personal spending plan I have what I am saving as well so I don’t forget to save some of the money I am making.

Here is an example of my budget sheet that I use, it is just missing the grid lines. At the bottom there is space to write three financial goals. Your goals could be to get something paid off in the next 6 months of to save more money. I revise my budget every six months and look at my goals and see if I am making progress or if I need to adjust my goals a little.

There is also an area for the once a year expenses like car tabs and the items my escrow pays for like my home insurance and my taxes.

Budget Sheet
Payment Jan Feb Mar April May Jun Jul Aug
Tithing/giving
House (due the 1st)
Elec/gas (due the 11th)
Water (due the 20th)
Trash
Daycare
Cell phone
Car ins
Phone
Cable
Internet
IRA or 401k
SAVINGS
COLLEGE
Aflec
loans
Gym membership

TOTAL TOTAL NEEDS TO BE BE LESS THAN YOUR INCOME Income_____________________
Taxes
Vehicle Tabs
House Ins

Financial goals
1
2
3