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Remember when we were little kids and we thought it would be so cool to be a millionaire one day? Because then you could have a mansion and a private jet and a room full of gold coins that you could swim in. And then we all grew up and inflation made life real expensive and we gave up on our hopes and dreams, much like a raisin. They were once grapes and then life just sucked.
the soul out of them and they became raisins all shriveled up. And while one million may still be a goal for you, it may not make all of your dreams come true. I mean, if you look at the average net worth in America, it's clear that most of us sadly will never become millionaires.
And that is a downright shame. It's a crying shame because it's still very possible to become a net worth millionaire if you simply do the right things with your money over a few decades. That's right. I'm going to show you how you can still become a millionaire in America today. And by the end, you can tell me that you won't, but don't tell me you can't.
I don't want to. But first, you want to know the number one habit of future millionaires, as surveyed by me? They hit like and subscribe on my YouTube channel. Okay, they make it a daily habit. They wake up, like and subscribe. And they share it with other future millionaires. So go ahead.
Share the wealth. Now, before we get started, let's clear the air. When I'm talking about millionaires, I'm talking about net worth millionaires, people who have a net worth of $1 million or more. Now, many of you know my story of how I went from broke to net worth millionaire in 10 years. Now, before you jump in the comments going, well, actually, George, technically, to be a real millionaire, your house shouldn't count as part of it. Shut it. This is just a financial term, net worth millionaire.
What you own minus what you owe. So your house counts, whatever you have in a retirement accounts count, all of it counts as assets. So if you have a million dollars in assets, but you have $200,000 in debt, technically you're not a net worth millionaire yet. So you might need to change your mental image of what a millionaire is, okay? Most millionaires, they're not traveling around the world sipping champagne and private jets. Or if you're a little bow wow, fake champagne on fake private jets.
♪ Sunday left me broken ♪ - Most millionaires out there, they look like you and me if they're lucky. They drive Camrys. They have a paid for house with a bunch of money in retirement accounts. They're not living this crazy, lavish life wearing all designer clothing, okay? Now you might be wondering, well, how do they get that money? Well, it turns out it wasn't a big inheritance or a reclusive rich uncle or some blank check from a shady mobster.
It was a whole lot less exciting. In 2019, Ramsey Solutions conducted the largest study of net worth millionaires ever done. They talked to over 10,000 of real life millionaires. And here's what they discovered. Most millionaires were self-made and their fortune came from investing in something as boring as an employer-sponsored retirement plan like a 401k. It wasn't in crypto. It wasn't some complicated life insurance infinite banking scheme. Not in some rare opportunity only available to the super wealthy. Just a good old trusty 401k.
And we studied 10,000 millionaires, but there's a whole lot more where that came from. In fact, there are around 22 million millionaires in the United States today. And that means about 8.8% of US adults are millionaires. That's amazing. While that may surprise you, it still means that 91% of folks still have a ways to go on their wealth building journey. So I'm gonna share with you four investing mistakes that keep people from building wealth and becoming millionaires so that you don't fall for them. The first mistake, not investing at all.
Now, this one may sound obvious, but you might be surprised how many people have nothing saved for retirement. According to a recent survey, about 27% of people who are 59 or older have no retirement savings. Zero. Zilch. Zip. Zero. Zilch. Nada. Niente.
The only thing they've saved is 30 years worth of Reader's Digest and a China cabinet full of Precious Moments figurines. Why, Grandma? They're so creepy looking. And look, if you're not investing because you're broke and there's nothing to invest, I get it. When you've got debt and a whole bunch of payments and not a lot of income to throw into the stock market, you're going to struggle to build wealth. So if you're living paycheck to paycheck, investing can seem like a luxury that only the wealthy can afford.
And if this is you, I can't stress enough the importance of getting out of debt and getting on a budget to create a little financial margin in your life. Now it's easier said than done, but I'm telling you, if you follow the debt snowball method and you get intense and focus all of your energy on those debts, you can become debt free in two years on average.
Once you do that, you'll be able to start setting aside something every single month to invest. Now, if you're not investing because it seems hard or confusing, no more excuses. Hey, no more excuses. I did a whole video on investing for beginners that makes it super simple and easy to understand. I'll drop a link below if you want to check that out. All right, the second investing mistake, not investing enough.
Now, once you're out of debt with a fully funded emergency fund, I recommend investing 15% of your income into retirement. Now, to some people, that may seem like a lot of money. And some of you are going, well, George, that's not nearly enough. I want to retire at 35 with $3 million in the bank. Well, hold your horses there, buddy, or sell the horse if you need to. 15% turns out to be plenty for most people. But if you're looking at your budget and you're thinking, there's absolutely no way I can put 15% into retirement.
Well, in that case, you might have an income problem or a spending problem or an expense problem. More on that later. But if your income really is too low, the first thing you need to do is find a way to make more money. Start looking for a higher paying job. Maybe work a second job or a third job or a side hustle or marry a wealthy prince.
or a princess, whatever it takes to get that income up. But another reason people don't invest enough is simply a lack of intentionality. We're doing 17 things at once. And based on the average income, becoming a millionaire is entirely possible as long as you don't live the average lifestyle. In fact, in our study of millionaires, one of the top three careers of net worth millionaires
with teachers. Can you imagine if we actually paid them fairly? They'd be flying private jets to school. So the problem here is not income. The problem is that we have no margin on our budgets, so we don't save and invest as much as we should. And then we end up in this stressful cycle living paycheck to paycheck with next to nothing in our retirement accounts. But it doesn't have to be like this. Make a budget that gives you the breathing room to put 15% into retirement and then stick to that plan like a Yeti sticker on a Toyota 4Runner.
Third mistake, not investing early enough. Now, this one's super important because of the power of compound growth. You see, in most retirement accounts, over 90% of the balance is growth at retirement age. That's crazy. That means only 10% of that balance is what you contributed to it. So let me show you the power of starting early with investing with this example from Financial Peace University with our friends, Jack and Blake.
So Jack starts investing at age 21 and invests $2,400 a year for nine years. Then he stops at 30 years old. So nine years of investing, total amount contributed, $21,600. His friend Blake starts investing at 30, and he invests $2,400 a year till 67. So he invests for 37 years. The total amount he contributes is $91,200. Now,
Now they're both at age 67. Jack's investment has grown to over $2.5 million. Blake's investment has grown to almost $1.5 million. So get this, nine years made a difference of over $1 million. Blake never caught up, even though he invested for a longer period of time. So the earlier that you start, the more time you'll have and the more your money will grow thanks to the power of compound interest.
So it's clear to see you should start investing as soon as you're financially ready, aka you're out of debt with an emergency fund in place. Once you're there, you're ready to start socking away cash in that 401k or whatever retirement vehicle you choose. Okay, the fourth investing mistake, not investing in the right things. And there's a lot of bad investments out there.
And some are way too risky, like single stocks and crypto and NFTs and this digital painting of a Pringles can, which is 100% real and 1000% stupid. And some are just plain bad, like investing through your index universal life insurance.
because this guy told you it's some wealth building hack? I did an entire video on why index life is a rip off if you wanna check that out. Now these bad investments get pushed on us all the time because guess what? Other people benefit when we do them. But if you wanna become a millionaire, do what actual millionaires do. And according to our millionaire survey, eight out of 10 invested in their company's 401k plan. And they said that that simple step was a key to their financial success. So keep it simple, invest 15% of your income into tax advantage retirement accounts
like a 401k or an IRA. Roth versions, even better. Again, if you want more information about how to do this, check out my video on investing for beginners. I'll link that below. And side note, your house is a huge part of your investment strategy and paying it off early is a big part of that. In that same study, we found that the average millionaire paid off their house in 10.2 years, which coincidentally is how long it took me to stop having nightmares about that kid from Willy Wonka that got sucked up into that
liquid chocolate tube thing? I know they said he lived, but have you ever been sucked up in a tube? How do you survive that? And everyone just went on with the tour as if nothing happened. I don't care what Willie said. I want answers. You get nothing! You lose! Good day
- Day, sir! - How does paying off your house early actually help you? Well, remember, your net worth is calculated by adding up the value of all of the assets that you own and then subtracting all of your debts. So a paid off house is a huge boost to your net worth. And houses appreciate over time, which means it's increasing your net worth literally while you sleep. Okay, so if most of us have the ability to retire with one million, why do we make these investing mistakes? What is keeping us from doing the right things to become a net worth millionaire? Well, the answer can be summarized in one word.
Overspending. What does this have to do with investing? Well, the more you overspend, the less you have to invest. It's simple as that. Now, why do we overspend? One of the biggest reasons is a little thing called lifestyle creep, which is my third least favorite creep after Creed from The Office and Oren from Parks and Rec. I like it.
Lifestyle creep is when your income goes up and then your spending creeps right up to meet it. So you don't even notice you got a raise because you just keep spending more and more. And the data shows us this. 50% of those making six figures are living paycheck to paycheck because of lifestyle creep.
Another big reason we overspend is comparison, aka keeping up with the Joneses. We see everyone's fake highlight reels on Instagram and their fancy trips to Italy and their new cars, and we think more stuff or more vacations will help us have as much fun as Becky seems to be having at Rosemary Beach with her 47-can Yeti purse. Or we see our co-workers' new Lambo and suddenly our perfectly good truck seems like a POS. Pretty old Silverado.
This is a family show. My mom watches this channel. She tells me she does. Or we see Larry next door driving a 25 horsepower, zero turn radius Cub Cadet mower with a hydro gear transmission. And suddenly our five-year-old push mower makes us feel like a mere peasant. So what do we do? Well, we spend money we don't have on things we don't need to impress people we don't even really like. I don't care that you broke your elbow.
And what makes this even harder is that we live in this culture that promotes debt out the wazoo. People think debt payments are just a normal part of life. You'll always have a car payment. You can't ever get rid of a mortgage. Tough times out there. A little man can't get ahead. Shut up, Randy. And if we're not careful, we get so distracted chasing airline miles and cash back rewards that we lose focus on building real long-term wealth.
So instead of worrying about what people think and making credit card companies rich, ditch the debt so you can fund your future instead. Okay, stop paying for the past. Start building for the future. That's how you become a millionaire. And the other thing you can do is practice gratitude and contentment. Run your own race. Stop caring about what other people think because truthfully, nobody cares about what car you drive or what you mow your yard with.
If your friends judge you for your lawn equipment, find better friends. So let's recap. If you don't want to end up like all those people out there with nothing safe for retirement, here's what you need to do. For starters, get you a little emergency fund of a thousand bucks. Once you have that, the rest of your money needs to go towards paying off all of your consumer debt from smallest balance to largest balance. That's called the debt snowball method.
Once you got rid of the debt, get a fully funded emergency fund in place that is three to six months of expenses. Then you're ready to invest 15% of your income into tax advantage accounts like 401ks, Roth IRAs. And once you're past that, you can start paying off the house early and
and investing even more. And you gotta start this as soon as possible. I showed you why with that chart of compound growth. And if you do this stuff long enough, you'll eventually be a net worth millionaire. Will it happen in the next year or two? Probably not. Could it happen in the next 10 or 20 years?
Absolutely. Now, some of you are probably thinking or already commenting, "George, it's too late for me. I'm too old. I don't make enough money. You don't understand my situation. I live in a high cost of living area. It can't be done." And to that I say, not with that attitude you can't. Chin up, Charlie. We're gonna do this thing. But seriously, let's take a quick look at the numbers and see how much you need to save to retire with $1 million. And for this example, I'm going to assume an annual average return of 11%.
which by the way, is the average annual return of the S&P 500, which is basically the stock market. So relax. So if you're 22 years old and you want to retire at the age of 62 with a million dollars, you would need to set aside 120 bucks a month. That's it. For most people, that's totally doable. Let's say you're 30 years old and you want to retire at 62 with a million bucks. You need to now save $290 a month. If you're 40 years old and you want to retire at 65 with a million dollars, you would need to save $640 a month.
If you're 50, and let's say you want to retire at 70, let's be realistic, and you want to have a million dollars, you would need to save $1,160 a month. So even if you're starting late, it's not impossible to become a net worth millionaire if you start doing the right things with your money. As always, make sure to like this video, subscribe to the channel, and share it with at least three to 10 people, or else you'll never become a millionaire. I'm just kidding. You can still become a millionaire, but if you break this chain, you're going to be cursed with ugliness for the next 10 years.
10 years. See, my mom, she sent me, she forwarded me that email. That's how I know. And I'm telling you to do it because I don't want to be ugly for the next 10 years. I can't afford that. Anyways, thanks for watching. I'll see you guys next time.