4 tips from financial planners to become a millionaire
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Lately I’ve become obsessed with making sure I’m doing whatever it takes to increase my wealth. After many years of making a ton of mistakes with my finances — from not having a pension plan to saving very little of my paycheck — I vowed to spend my 30s doing things differently.
Now that I have a solid foundation on how to manage my money on a monthly basis, I want to know what other steps I can take to ensure my money keeps growing for years to come. That’s why I asked three financial planners to share their top tips for those trying to reach millionaire status in 10 years or less.
1. Spend less than you earn
Easier said than done, sticking to a savings and spending plan can transform everything about your finances.
Financial planner Scott Turner recommends first making sure you’re spending less than you’re taking in.
“You can’t beat bad consumption habits. You can make $1 million a year, but if you’re spending $1.1 million a year, it doesn’t matter — you’re still broke,” says Turner. “Pick a percentage of the money to save each paycheck and do your best to be consistent.”
2. Prioritize paying off debt
According to financial planner Jay Zigmont, if your goal is to grow your net worth and hit seven figures, it’s necessary to prioritize paying off your debt.
“Debt steals your future,” Zigmont said. “Pay off all your consumer debt and eliminate debt as an option in your life.”
3. Maximize tax savings
When building your financial portfolio, financial planner Katherine Fox recommends choosing the right accounts to maximize tax savings.
“Where You save is just as important as how much you save,” Fox said. “Focus on maximizing all tax-deferred accounts first.”
Deferred tax accounts include things like IRA or Roth IRA, 401(k) and 403(b) plans, and Health Savings Accounts (HSA).
“Once you’ve maxed out contributions to all of these accounts based on your age and income level, open a taxable brokerage account and start funding a taxable brokerage account with additional savings,” Fox added.
4. Believe you can do it
While it may sound cliche, Turner says it’s important to make sure you have a strong mindset about making money and becoming a millionaire.
“That’s the most underappreciated piece of advice,” Turner said. “People who don’t believe in themselves can end up sabotaging their own finances.”
He added that people who believe in themselves tend to seek better advice and mentors and associate with people who have similar goals, which can help you stick to your financial plans.
“If you believe you can, you’re more likely to make the right decisions to achieve your goal of joining the double comma club,” Turner said.