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How Teens Can Become Millionaires

Adulting is sort of a mixed bag, isn’t it? On one hand, you can finally do what you want (make your own decisions, stay out as late as you want, and even rent a car on your own). On the other hand, you can start looking forward to the things that aren’t so fun: paying for the boring stuff like insurance, emergency root canals, and even those expensive light bulbs.

With that in mind, we have one question for you: Are you ready to be financially responsible? If you answered yes, congrats—you’re ahead of the game! But if you answered no, don’t worry—there’s still plenty of time to set yourself up for a future of success. And we’re here to point you in the right direction.

A Millionaire’s Best Friend: Compound Interest

Millionaire. Sounds like a far-off dream, right? Actually, it’s more realistic than you might think. With hard work and intentional planning, you can become an everyday millionaire. One way to do that is by using a little money magic called compound interest.


How much will you need for retirement? Find out with this free tool!

Here’s a little secret: Compound interest is a millionaire’s best friend. It’s free money. Seriously. But don’t take our word for it—let us introduce you to our friends Steven and John.

When Steven turned 21, he decided to start investing $200 a month every year for nine years. At age 30, he decided to stop investing altogether. But his friend John started when Steven stopped, investing $200 a month every month starting at age 30, all the way until the ripe old age of 68.

So at age 68, who do you think had more money in their account? Let’s do the math.

At the end of nine years, Steven invested $21,600, didn’t invest another dime, and ended up with close to $2.35 million at age 68. Let’s say that again—$2.35 million! That’s the power of compound interest, friends.

And Steven’s friend John invested a whopping $91,200 over the course of 37 years. At age 68, he had built up $1.3 million, but he never caught up with Steven.

So how did Steven do it? He didn’t invest nearly as much as John did but ended up with over $1 million more. That’s the power of compound interest! It turns more than $20,000 invested in nine short years into almost $2.35 million over 37 years! Try our compound interest calculator that will do the calculations for you.

You Can Be an Everyday Millionaire

When you think of the word millionaire, you probably think of an older gentleman (or woman) sporting a fancy suit—pocket square included. Or you might think of people like Jay-Z and Beyoncé with their cool clothes and private jet.

No matter what you see, it’s probably safe to assume that more millionaires are older rather than younger. But don’t assume that just because you’re young that you can’t start working toward that goal. In fact, the National Study of Millionaires found that “if members of younger generations are diligent over time, they can become net-worth millionaires in their own right.”

Millionaires view investing as the primary tool for building wealth and securing financial peace. In fact, 80% of net-worth millionaires in the study said that investing in their employer-sponsored retirement plan was the main way they reached millionaire status.1 Meanwhile, 74% mentioned investing outside the company plan, and 73% mentioned the habit of saving money regularly.2

What can you do? Start early. Start now. And if you’re not in your 20s—that’s okay. It’s never too late to start—even right now.  

What You Can Do Now

The best thing you have on your side is time and good money decisions. You can choose to not go into any debt—not even for college. And that decision alone will put you way ahead of the game.

Think you might want to go to that fancy private school? Think again. Sure, you might look good when you’re wearing the sweatshirt, but is it really worth it? (Trust us—it doesn’t matter as much as you think it does.) The worst thing you can do to your future is get buried in payments before you’re even out of your parents’ house!

We believe in you (and your future). Don’t get caught up in the lie that the only way to go to college is with debt. It’s possible to get a debt-free degree. Check out Anthony ONeal’s book Debt-Free Degree and learn how you can go to school and chase after your dreams while leaving debt in the dumpster.

And before you start investing, you’ve got to start saving and paying off any debt you may already have—then you’ll be ready to start investing. Yup, we’re talking about the 7 Baby Steps:

  1. Save $1,000 for your starter emergency fund.
  2. Pay off all debt (except the house) using the debt snowball.
  3. Save 3–6 months of expenses in a fully funded emergency fund.
  4. Invest 15% of your household income in retirement.
  5. Save for your children’s college fund.
  6. Pay off your home early.
  7. Build wealth and give.

As you probably noticed, there are some steps on there you might not be ready for yet. But don’t let that stop you from focusing on Baby Steps 1–4! Since you’re still living under your parents’ roof, talk to them about what a fully funded emergency fund would look like and how much you should start investing . . . when you’re ready.

Imagine what your future could look like if you started today! Talk to your parents or teachers about your dream of becoming an everyday millionaire. Ask them how to start investing now.

And if you’re ready to get started, make sure you connect with a financial advisor—someone who can teach you all about investing and help you pick and choose the right investments for your portfolio. Our SmartVestor program makes it easy to find qualified investment professionals who can serve you.

Find your SmartVestor Pro today!

Want to learn more? Dave's new book, Baby Steps Millionaires, will show you the proven path that millions of Americans have taken to become millionaires--and how you can become one too! Pre-order your copy today to learn how to bust through the barriers preventing you from becoming a millionaire.

Ramsey Solutions

About the author

Ramsey Solutions

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.

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An image has shapes and various phrases to describe compound interest.

How Does Compound Interest Work?

Let’s take a quick walk down memory lane—to algebra class. Do you remember learning about exponential growth? You have an equation to work out, and then you map a curved line on some graph paper. It starts out low and gradual, but when it finally takes off, it skyrockets! If I’m sounding like Charlie Brown’s teacher right now (wa-waa-waa-waaa), hang with me. Exponential growth explains how compound interest works, and—if you use it right—this powerful formula could make you millions of dollars. I bet you’re tracking with me now!

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