Becoming a millionaire is a giant money goal, but you don’t have to take giant leaps to get there. For blogger J. Money of BudgetsAreSexy.com and RockstarFinance.com, reaching the milestone one day is all about setting realistic goals, like saving half his bonuses and maxing out a Roth IRA each year.
Over the last nine years, his millionaire to-do list has helped him grow his net worth from $58,000 to more than $675,000. At this rate, he’ll hit the $1 million mark in about 11 years, at age 46—though he’s OK if the end date changes if it allows him to “live more in the here and now,” he says.
Money’s Million Dollar Club has since expanded its membership and inspired dozens of others to make millionaire to-do lists of their own. We gathered seven habits you’ll find on many of their lists.
1. Pay yourself first.
Earmarking cash for savings and investments before you have the chance to spend it can help you hit any money goal—so it’s no surprise that it’s a mainstay on millionaire to-do lists.
“Up your game by using a completely different bank than your checking, so transfers take days and you don’t risk getting weak in the knees over an impulse buy,” suggests Bianca, a flight attendant who’s working toward early retirement.
2. Max out tax-efficient retirement funds.
Another popular item that appears on virtually every list: routinely maxing out tax-advantaged retirement accounts. For 2017, you can contribute up to $18,000 to a 401(k) and $5,500 to IRAs if you’re under 50. (Read more about the difference between the accounts here.)
Blogger Joy Money prefers a Roth IRA: “You pay taxes upfront but then your investment grows entirely tax-free and you can take that money out tax-free in retirement.”
3. Keep investing fees to a minimum.
Throwing away chunks of money on investment fees is a good way to derail your progress, which is why many future millionaires rely on low-cost index funds and exchange-traded funds (ETFs) to build wealth. Bonus: Investing in funds also provides broad diversification, allowing you to invest in potentially hundreds of stocks and bonds in one fell swoop.
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4. Get debt-free.
Funneling money toward debt and interest payments can also slow you down, so prioritize getting your balances down to zero. ”That could mean working a part-time job or side hustle; remember that becoming a millionaire is a challenge, which means that we have to work harder and smarter to achieve it,” says another aspiring millionaire, “Gen X Investor,” whose to-do list includes paying off a home equity line of credit. Most aspiring millionaires were also working to pay off their mortgages so they could live completely debt-free.
5. Up your passive income streams.
Adding a passive income stream—from dividend investing to renting unused space—can further accelerate your progress. “Too many people are dependent on just one source of income: their job,” adds Gen X Investor. ”By contrast, [it’s said that] the average millionaire has at least seven sources of income. This extra income can be used to cover monthly bills or reinvested to accelerate the compound growth of investments.” (That’s when the interest you earn on your initial investment earns interest, too, and so on…)
6. Never buy a new car. (Like, ever.)
Cars are depreciating assets, making them big-time wealth destroyers. Financing a purchase could leave you shelling out hundreds each month that could be going toward your savings goals—making this another popular to-do list item.
“I used to think it was embarrassing to buy a used car—now I think it’s embarrassing to buy a new one,” says Joy Money, who’s always paid in cash for preowned cars.
7. Make your money go further.
There’s plenty of room for creativity when it comes to stretching your dollars. Blogger Stefano Serana eventually plans to move to a budget-friendly destination where his nest egg will go farther than his current home in the U.K. Another blogger vowed never to pay full price for purchases and to negotiate big-ticket items. Other ideas: buy all your basics in bulk, stay put in your starter home versus upsizing and direct your spending toward experiences you’ll cherish, “not keeping up with the Joneses.” All good advice, no matter where you are on the journey to $1 million.