This Is How a Janitor, a Teacher, or a Librarian Can Become a Millionaire
How do you end up with a million dollars? You start with two million dollars. Jokes aside, most people think there are only three ways to become a millionaire. You must:
- be born rich
- earn a high income
- or marry into wealth.
Many people don’t believe they’ll ever be millionaires, so how could a librarian, a janitor, or a teacher do it? Nobody thought Genevieve Via Cava, a teacher from New Jersey, was serious. When Ms. Via Cava told her school’s superintendent that she wanted to make a million-dollar donation, he laughed. He wasn’t smiling when a million dollars arrived from Genevieve’s estate to fund special needs students’ education after high school.
People were equally as stunned when Ronald Read provided $8 million to a local library and hospital. No one could fathom that the local gas station employee and manager had that kind of money.
Four Simple Rules to Become a Millionaire
Many wealthy people have lost their fortunes over the years. Mike Tyson, who earned $300 million during his career, owed $23 million when he filed bankruptcy in 2003. If your goal is to have at least a million dollars in the bank, you must do some work. It doesn’t matter how much money you have, what is important is how you use it. Use the rules below to start working toward your first million.
1. Fight the Urge to Compete with the Joneses
“Silent” millionaires work regular jobs and live modest lifestyles, actively working to keep their expenses as low as possible. They aren’t tempted to own the biggest, best, or latest object money can buy. These millionaires will purchase cars secondhand, and maintain them until it makes financial sense to buy another one. Silent millionaires clip the coupon for groceries and shop the sales. Their homes may be small and modest, but they are paid off.
Silent millionaires know the value of saving. Many experts recommend saving between 10% and 20% of our income, but quiet millionaires aim to save a lot more. Remember Ronald Read, the gas station attendant from above? His friends said if Read earned $50, he would save $40.
If you want to become a millionaire, you should be saving at least 30% of your income, according to Cary Carbonaro. (Carbonaro is a Certified Financial Planner and a United Capital Managing Director.) The rest of the work, according to Carbonaro, comes from compound interest.
2. Start Investing as Soon as Possible
You could put 30% of your income in the bank. At 0.25% interest per year, you’d need $10,000 to make $25. Silent millionaires know the best accounts let them use compound interest to generate higher returns. They also play a long game, purchasing stock to hold on to it for decades. Any dividends earned are reinvested in their accounts, increasing their new principle for the next compounding period.
If you don’t have thousands to invest, consider individual stocks or an exchange-traded fund (ETF). Many of them allow you to start with a low initial investment, then add more over time.
3. Make Some Extra Money on the Side to Become a Millionaire
If you have the bandwidth, consider taking on a side hustle. You may not realize it yet, but there is always someone who will pay for something. If you have a car, you can become an Uber or Lyft driver outside of work, or advertise your car on a ride-sharing app. That extra bedroom can be an occasional rental or a long-term subletting agreement. Use a skill or specialized knowledge to teach or become a consultant. Use social media and build a following that can be monetized through advertising income and affiliate marketing.
There is one thing we would caution, though. Many businesses go through a period of income loss in their startup phase. However, you should notice these losses decreasing as you get closer to your break-even point. (This is the point where your business begins to make money.) If you’re experiencing substantial losses or your break-even point is too far away, reconsider your side hustle. You may have to change your strategy or your business altogether.
4. Never Stop Learning about Your Finances
Silent millionaires don’t put their money aside and walk away. They know the money was earned through hard work and sacrifice. They actively manage their money: reading up on financial news and investment topics. Many of them communicate regularly with financially educated friends and advisers. Sylvia Bloom, a legal secretary from Brooklyn, would observe stocks her bosses would purchase. She would follow up by buying the same stocks herself, in more modest amounts. When Ms. Bloom passed on, her net worth was $8.2 million.
Silent millionaires aren’t extraordinary people. They’re ordinary people like you and me who do things just a little bit differently. They understand a few basic concepts that we take for granted:
- save as much as possible
- keep expenses to a minimum
- invest early and frequently
- and keep learning about money.
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