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Here’s Your Permission Slip to Become a Millionaire

Can we be honest? We’re tired of hearing people make millionaires out to be big, bad wolves. That all wealthy people are evil, greedy, self-centered people who inherited or stole money to get rich. It’s as if there were something wrong with being wealthy.

Listen, people: Money is neutral—what matters is how you get it and how you spend it. And most of the wealthy people we know didn’t swindle anybody. They worked hard. They saved. They sacrificed. And now they get to enjoy the results of that patience and perseverance.

And you can too. Anybody can. Everybody should. Let’s talk about why.

Why It’s Okay Become a Millionaire

We get it—not everybody wants to travel the world. But for a lot of Americans, becoming wealthy isn’t just a lofty dream—it’s a necessity. Here are four reasons why it’s okay—and important—to become a millionaire:

1. The Length of Retirement

Back in 1960, people retired around age 65 and had a life expectancy of 80, so they only had to fund their retirement for about 15 years.1,2 But now, according to a recent Gallup poll, current retirees said goodbye to the workforce at age 61 and current workers expect to retire at age 66.3 But people are living longer now. The current life expectancy for Americans is 84 years for men and 86 years for women, and one in four people will live past age 90! 4 That means you’ll need enough money to live on for at least 20-25 years.

2. The Cost of Healthcare

According to a recent Fidelity study, a 65-year-old couple retiring in 2018 would need $280,000 to cover their medical expenses during their retirement years.6 Now, that amount doesn’t include long-term care, like living in a nursing home or home health care. That could cost an additional $138,000 per person!7

Now, we know you’re thinking that you’re healthy and you won’t have extensive medical needs. Sorry, but the government has estimated that someone who’s 65 years old today has almost a 70% chance of needing long-term care at some point.8

Let's be crystal clear: Health care in retirement is freaking expensive. That’s another reason you may need to hit the million-dollar mark.

3. You Can’t Count on Social Security

We can’t count how many times we've heard people say they’ll just live on Social Security when the time comes. People, that’s a very. bad. idea. In 2018, the maximum monthly benefit a person could receive at full retirement age was $2,788, but the average payment in August 2018 was just $1,415—which comes to just under $17,000 annually.9,10  That’s only about $5,000 above the poverty line of $12,140.11

If that’s not reason enough to kick your wealth building into high gear, listen to this: You may not get the full amount you expect by the time you retire. Even as we speak, Social Security payouts are higher than its income.12 If things don’t change, its reserves will go dry in 2034.13  To make sure it doesn’t, law makers want to decrease the amount people get in monthly payments. Nothing has been settled yet, but it’s on the backburner.

4. You Want to Leave a Lasting Legacy

This final reason to build wealth isn’t about facts and figures. It’s about your family. Most people want to leave a strong financial legacy for the people they love the most. Nobody wants to see their kids or grandkids struggle. And can we be honest? Knowing that your family will be taken care of long after you’re gone gives you peace of mind. Having that safety net in place lets you sleep easier at night.

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Even if you don’t have family, you may want to leave a legacy by giving to others generously. We all want to make a difference in the world. There’s nothing like surprising that single dad with money to buy his kids’ Christmas gifts. Or leaving a $100 tip for an overworked server. Or paying for someone to go on a mission trip. Giving away your money is the most fun you can have with it!

Sure, you might not have to break the million-dollar mark in your piggy bank. But given these reasons for building wealth, why would you try to gut it out with less? Especially since becoming a millionaire is possible. Very possible. Even for people like you and me. Let's show you how.

How to Become a Millionaire

Listen to this: nearly 10 million people in the U.S. reported a net worth of $1–5 million in 2017. 14  And that doesn’t even include the value of their home! Do you know what this tells us? That becoming a millionaire is possible for anyone. It’s not just for trust fund babies or lucky lotto winners. So how do everyday people make it happen? The formula is simple—but following it takes patience and perseverance. Here it is:

Monthly contributions + mutual funds × time + compound interest

That’s it. See? We told you the process is simple. But I’ve met a lot of people who don’t use all the pieces of this formula, so they don’t maximize their wealth-building potential. Let’s look at each of them.

Monthly contributions

Making regular deposits into your investment accounts is a key component in building wealth. You can’t become a millionaire by putting away money when you feel like it or when you have money left over at the end of the month. It has to take priority.

You need to invest 15% of your gross income every month without exception. Since you’ve already got an emergency fund in place and you’ve paid off your debt (except the house), hitting that mark is absolutely doable. You may have to sacrifice some things—like that fancy vacation or designer wardrobe—but you can invest that much.

So, how can you make sure you’re putting away money every single month? Automatic withdrawals. Whether you’re investing through work or through a brokerage firm, you can arrange to have a portion of your paycheck (either a fixed amount or a percentage) go into your investment account. That way, you aren’t tempted to use that money for living room furniture or the newest tech toy.

Mutual Funds

You may get tired of hearing this because it’s not flashy or trending, but the best way to grow your money is to invest it in mutual funds. Yep. No get-rich-quick schemes. No pyramid marketing ploys peddling skincare or kitchen items. Just simple mutual funds.

Spread your investments across four groups of funds: growth, growth and income, aggressive and international. This mix of funds will balance out your portfolio and protect it against the ups and downs of the market.

At least once a year, sit down with your investing pro to look at the funds you’re in to make sure they’re still balanced. One sector of funds may go wild (like technology) while another struggles (like textiles), so you may have too much (or too little) money in one fund.

Time + Compound Interest

Building wealth doesn’t happen overnight. Money needs two essential sidekicks to grow: time and compound interest—and they’re inseparable. Here’s an example to illustrate.

Cathy starts investing $500 a month at age 25. She continues to do this for 30 years until age 55. In that time, she puts away $6,000 a year, or $180,000. She invests in a balance of mutual funds through her workplace 401(k) and earns a 10–12% return each year. At the end of 25 years, her investments might have grown to $1.085 million. If she invested 35 years, or until age 60, she could top $1.7 million, assuming a 10% rate of return. That’s consistent investing in mutual funds plus the power of time and compound interest. Try our compound interest calculator that will do the calculations for you.

Cathy’s next-door neighbor, Carl, got serious about his investing at age 40. He realized the importance of building wealth and wants to reach the million-dollar mark. If he wants to invest $500 a month, he will need to delay retirement until age 70. Or if he wants to reach $1 million at the same time as Cathy (age 55), he’ll need to invest $2,500 a month! Carl has to play catch-up because he has a smaller time window for the compound interest to grow.

It’s time for a change. It’s time for a new way of thinking. It’s time for ordinary people like you to reclaim the possibility—and ability—of becoming millionaires. But it only happens when you decide to take control of your finances and turn the tide in your favor.

It’s time for you to act.

What are you waiting for?

To start building wealth, connect with a SmartVestor Pro. These folks know investing inside and out. And they want to work with you to meet your financial goals.

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Find Your Pros

This article provides general guidelines about investing topics. Your situation may be unique. To discuss a plan for your situation, connect with a SmartVestor Pro. Ramsey Solutions is a paid, non-client promoter of participating Pros. 

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About the author


Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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