A young man asked this question after getting his first job recently. This is an excellent question worth discussing.
The easiest way to become a millionaire is to be born into a family that sets up a million plus dollar trust fund for each child. The other easy way to become a millionaire is to play the lottery. The catch is you have to win the lottery in order to become a millionaire that way. (On a side note imagine if people invested the money they pay for lottery tickets and made 5% on it over a 40 year period? Subject for another post I guess.)
But back to reality. Most people aren’t born into family’s with incredible wealth and most people will not win the lottery in the course of their life-time. The first scenario is out of our control and the second is statistically improbable at best. So here’s a few thoughts on the matter.
Make the commitment to spend less than you earn. That means that you are putting some money away towards savings and retirement every time you get paid.
Avoid debt if at all possible. Consider long and hard before you take on any debt. There are a few examples such as education and a home mortgage where debt may in fact be worth it. When you do get a credit card treat it as a debit card. Pay off the entire balance each and every month. If you can’t pay the credit card off that month then don’t make the purchase.
Don't worry about "keeping up with the Jones’s” when it comes to stuff – latest cars, boats, motorcycles, bigger houses, etc. Don’t expect to have everything your first five, ten, or even fifteen years your parents have taken a life-time to accumulate.
Take some time to educate yourself about personal finance. Some good personal finance books:
Consider getting a mentor. If you can find one or two adults whose financial behavior you wish to mimic. Observe them and ask questions of your metor. Perhaps someone at your job, your local church, or a relative.
Shifting gears to long-term what are your goals, objectives, and dreams in life? If you go to college, which I do recommend, what degree would you pursue? How much debt will you have to take on to get the degree in college? What kind of job could you possibly get with said degree? What is the average starting salary for people in said industry in the U.S. and in the state you live in?
If you’re planning on going to a technical school (Dental hygiene, culinary school, paralegal, etc.) l what profession would you be attracted to? How much debt will you have to take on to get the degree at the technical school? What kind of job could you possibly get with said degree? What is the average starting salary for people in said industry in the U.S. and in the state you live in?
If you have entrepreneurial tendencies, consider the possibility of starting a company or being self-employed rather than being an employee of an organization.
If you do get married choose your spouse very carefully. Divorce is horrible on a variety of levels. Financially, it can be devastating towards wealth building...
Bottom line: It’s not easy but it IS possible to become a millionaire. It is attainable but takes time, dedication towards spending less than you make, dedication to save money each month, and a game plan to save for retirement. I'm not there yet but I plan to have a net worth of 1 million by the time I retire.