How to Make a Million Dollars

There are many paths to earning your first million dollars. But don’t listen to those who tout get-rich-quick schemes. Making a million dollars requires hard work and years of diligent saving.

Some people inherit money or benefit from a high salary, but those are exceptions to the rule. Below are 10 tried-and-true principles you can implement to help you reach that million-dollar goal.

Table of Contents
  1. 1. Start Early
  2. 2. Reduce Your Monthly Expenses
  3. 3. Seek Career Promotions and Pay Increases
  4. 4. Max Out Retirement Contributions
  5. 5. Own Income-Producing Assets
  6. 6. Utilize High-Yield Savings Accounts
  7. 7. Use a Net Worth Tracker
  8. 8. Stay Positive
  9. 9. Find a Mentor
  10. 10. Start a Side Hustle
  11. Summary

1. Start Early

When saving money, the sooner you start, the smaller your contributions need to be. For example, you may only have to invest a modest amount of money each month to reach a million dollars by a certain age when starting in your 20s. However, you’ll need to invest more money if you wait until your 30s or 40s to get started, as you have less time to benefit from compound interest.

When you start saving money at a younger age, you can be more aggressive with your investments without being reckless. An index fund portfolio can be the central piece of your investment strategy. Low-cost index funds offer exposure to stocks with high potential for growth but also carry more volatility. You can shift to more conservative assets as you age and move into a wealth protection mindset.

When you save money over decades, you have time to recover from the inevitable downturns that will impact your portfolio.

Tip: We’ll cover this in more detail later, but we recommend opening retirement accounts for your long-term savings. These accounts offer tax advantages that can greatly enhance your returns over time. Also, avoid expensive investments such as actively managed mutual funds, as most have delivered sub-par performance, partly due to high fees that eat away at returns.

Related: 9 Best Million Dollar Jobs for Regular People

2. Reduce Your Monthly Expenses

Lowering your monthly spending and paying off debt frees up more cash to save and invest. Depending on your situation, you may need to reverse lifestyle creep. That’s where your monthly expenses increase incrementally with your salary increases. 

Here are some options for cutting back:

  • Negotiate your recurring bills (i.e., cell phone, cable TV, and home internet)
  • Cancel unused or redundant subscriptions
  • Switch to cheaper alternatives
  • Delay expensive purchases 

Several free budgeting apps help track your spending, identify unnecessary expenses, and track how much you save each month. Learning how to spend less money is an ongoing process, and adjusting to a simpler lifestyle can take a few months.

Don’t forget to periodically review your monthly bills as prices can increase and your habits can change.

Having a high income definitely makes it easier to reach the $1 million goal sooner. Especially when you can keep your living expenses stable and save more of your salary. It’s also essential to remember that you can only cut your costs so far. At some point, you need to focus on increasing your income.

Your first step should be to pursue a job promotion with the same employer or move to a higher-paying competitor. If a promotion isn’t possible, you may also be able to negotiate a pay increase. Perhaps you’re due for a market adjustment as new hires earn more than you.

4. Max Out Retirement Contributions

Contributing to tax-sheltered retirement savings accounts is one of the best ways to make a million dollars, as high-quality assets generally appreciate in value over the long term.

Many people strive to reach the annual contribution limits for Roth IRA or 401(k) as you can make tax-free withdrawals after age 59 ½.

The annual IRA and 401(k) contribution limits for 2024 are as follows:

  • IRA contribution limits: $7,000 if under age 50 and $8,000 when 50 or older.
  • 401(k) contribution limits: $23,000 in employee contributions if under age 50 and $30,500 when 50 or older ($7,500 catch-up contribution). Employer and employee contributions can total up to $69,000 if under age 50.  

The top Roth IRA providers can help you avoid account and trading fees and trading commissions while offering a generous selection of investment options. You want to avoid bad 401(k) plans with high expenses or lousy investment choices. 

Tax-advantaged investing is a powerful wealth-building strategy, but you won’t want to put all your money into these accounts as you’ll pay a 10% early withdrawal penalty before age 59 ½ (and for Roth accounts open fewer than five years).  

5. Own Income-Producing Assets

Income-producing assets can provide passive income that can eventually replace your earned income. Dividend stocks and real estate are good examples of assets that can produce recurring income.

Your first real estate investment will likely be your principal residence. There are upfront costs to consider: You’ll have to save for a down payment and ensure you can afford the various costs of owning a home.

However, once you build some equity, you can convert your home into your first rental property and begin earning rental income. Income properties and dividend-paying stocks also help you build net worth by serving as a store of value.

6. Utilize High-Yield Savings Accounts

Keeping short-term funds and emergency reserves in a high-yield savings account is an easy way to earn a competitive interest rate until you need it to spend or find a more lucrative investment vehicle. 

Now that interest rates are at attractive levels again for the first time in over a decade, savings accounts are once again a low-risk way to generate passive income. Consider spreading your deposits across multiple FDIC-insured banks to get the best yields and for financial protection.     

Raisin (previously SaveBetter) is a free and easy-to-use platform that offers exclusive rates for high-yield savings, money market accounts, and bank CDs. You can quickly transfer funds to the highest yield and receive a single year-end tax form tallying up your annual interest income.

Read our Raisin review for more.

7. Use a Net Worth Tracker

A net worth calculator helps you track your financial progress. It can help you identify areas needing improvement, too. There are several different calculators to choose from that do more than just measure your net worth. 

Net worth tracking apps commonly include budgeting or retirement planning tools, and investment trackers. Some even store essential documents and estate plan notes.

The in-depth tracking can motivate you to save more and achieve your goals sooner. 

8. Stay Positive

Most people don’t become overnight millionaires. It takes many years, decades, even, to make a million dollars. 

Therefore, patience, persistence, and flexibility are necessary as your actual plan may take several unanticipated twists and turns as life happens and market conditions change.

Use cognitive bias to help you think optimistically about money, wealth, and your daily routine. You should also shun negative money biases that can cause you to give up too soon or succumb to instant gratification.

Your journey to a million bucks should also be fun. That’s why adding rituals to your routine can break up the monotony. Some examples include seasonal trips, or other creature comforts you indulge in periodically to maintain that special feeling.     

9. Find a Mentor

Receiving money advice from successful millionaires can help you stay the course. Consider joining a mastermind group with like-minded people where you can exchange ideas and avoid pitfalls. 

For example, you could attend the annual FinCon Conference. This is a multi-day gathering of financial influencers, money nerds, and people curious about learning more about personal finance. There are breakout sessions and plenty of opportunities to meet people pursuing similar financial goals and building relationships.  

Having a support network makes accomplishing most tasks and dreams easier. It’s tough to put a price on fruitful conversations and networking events that reinforce what you’re doing correctly and expand your horizons to enhance your lifestyle potential. 

Related: How Much Is 6-Figures, 7-Figures, 8-Figures, and 9-Figures?

10. Start a Side Hustle

According to MarketWatch, more than half (54%) of Americans have started side hustles in the last 12 months. While many are doing so to keep up with rising costs, side hustles can also be an effective way to build wealth outside your regular day job.

With the right side hustle, you can make a lot of extra money, and there is no shortage of ideas you can try. The perfect side hustle will differ for everybody, but many local and online options exist. For example, you can sell freelancing services, flip items on Facebook Marketplace, or join the gig economy using apps such as DoorDash, Uber, TaskRabbit, or Airbnb.

If you need some help coming up with a side hustle idea, check out this list of weekend side hustles or these side hustles you can do from home.


We’ve covered the basic steps to becoming a millionaire. None of the ideas presented are get-rich-quick schemes. They require patience and repetition over many years. But the more money-making ideas you can implement, the better your chances of achieving financial freedom.

For example, you can strive for promotions at work while paying down debt, maximizing your retirement contributions, and starting side hustles.

Just remember to keep it balanced. While building wealth is a positive thing, as with anything else, you can overdo it and lose sight of what money can’t buy, like relationships with family and friends and various experiences.

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About Josh Patoka

After graduating in $50k with student loans in May 2008 from Virginia Military Institute with a B.A. International Studies and Political Science with a minor in Spanish (he studied abroad in Sevilla, Spain for 3 months), Josh decided to sell his soul for seven years by working in the transportation industry to get out of debt ASAP and focus on doing something else with a better work-life balance.

He is a father of three and has been writing about (almost) everything personal finance since 2015. You can also find him at his own blog Money Buffalo where he shares his personal experience of becoming debt-free (twice) and taking a 50%+ pay cut when he changed careers.

Today, Josh relishes the flexibility of being self-employed and debt-free and encourages others to pursue their dreams. Josh enjoys spending his free time reading books and spending time with his wife and three children.

Opinions expressed here are the author’s alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.

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