For whatever reason $1,000,000 is the magic number for a lot of people. They think having that much will solve all their problems. For some people (like lottery winners) having a large amount of money actually increases their problems. But for those who earn it through hard work, saving, and investing it can be well deserved validation for all your efforts. But how does one actually obtain $1,000,000? Well, there’s a million ways to do it! (Pun Intended). One of the easiest and likely most boring is simply maximize your IRA (or Roth IRA) contributions each year. By investing the maximum amount each year ($5,500 in 2015) in the stock market (assuming historical rate of return on stocks of 10%) you should have $1,000,000 dollars in 28 years. If you start when you're young (age 30) you'll be 58 when you reach the million dollar milestone, not too bad. Well before the average person retires. But you want your million faster? Well, there’s no way to change the math, if you want $1,000,000 in ten years you need to be saving about $50,000 per year. I recommend this be your base - make sure you are at least contributing to your IRA or other Investment accounts and then find other ways to make your million. Here are some stories of inspiration from around the web on how some other people made their $1,000,000 (sometimes many times more than that).
1. Self-Publish E-Books – Amanda Hocking, only 29 years old, sells about 100,000 per month of her e-books on Amazon.com. Her books only sell for $1 to $3 but that still means she makes over $1,000,000 per year.
2. Website Advertising – Ales Tew created a website and sold advertising at $1 per pixel. He sold out his 1 million pixels in 5 months. I don’t think you can replicate this website but it shows you the power of online advertising.
3. Monetize your Hobby – Ok, so you don't want to lose the stability provided by your day job? Then start earning some extra money on the side from your Hobbies. These three people created million dollar plus businesses out of Gardening, Sewing, and Horse Racing. Whatever it is you enjoy other people probably do too. Figure out how to connect with them either by starting a blog, a company, or networking group.
4. Real Estate – Being a small time real estate investor myself. I know this can be a great way to build wealth (if you do it right). The two biggest tips are buy it right (you make your money when you buy) and make sure it cash flows (real estate can be hard to hold onto if it costs you money every month). The website BiggerPockets.com is full of successful and aspiring real estate investors. They even offer a step by step guide called How to make a Million Dollars from Real Estate.
5. Slow and Steady wins the Race – This guy knew what he wanted to do and he did it for 30 years eventually building a $1,000,000 pension. He was a firefighter, just an everyday kind of guy, and is now worth over a million. Or this guy who never made over $11/hour who just donated $2,000,000 to two New Jersey schools. He lived below his means and took advantage of opportunities when they came along.
These are just a few examples of ways to make a million. Most millionaires don't look like the typical a millionaire you see on TV or in the movies. They live in a reasonable house, eat at home, don’t feel the need to flaunt their money with cars, jewelry and other material items but instead live a life doing what they love but being smart about it. Having a million dollar portfolio won’t solve all your issues but it does tend to make things a little easier.
Do you want to create your own plan to get one million dollars? Schedule a meeting or give us a call.