Becoming a millionaire by 50 years old doesn’t have to be a dream. Thousands upon thousands of people have managed it! Most of them have done so by pulling themselves up by their bootstraps, too. Think about all the big businesses you see making CEOs millions each year. They all had to start somewhere.
It’s easier said than done, perhaps. So, how do you become a millionaire by 50? You need to seriously invest. Not just money, but time, too. No matter your financial starting point, there are plenty of great ways you can get the ball rolling. Let’s take a look.
Tips to Help You Become a Millionaire by 50
Invest £10 Per Day
£10 per day might not seem like much to some people. To others it might seem like a lot to save each day. But think about it on a grander scale. If you save £10 per day for a whole year, you’ve saved £3,650. Save for five years, and you’ll have £18,250. If you’re not going to miss that money short term, it’s time to start investing. But how?
Think about looking into a savings account or an ISA with a healthy interest rate. If you save for a whole year, you’ll get, for example, 5% of it on top as interest after 12 months. Save for another year, and you’ll get even more interest, based on your initial savings and last year’s interest. This is called compound interest, and it can be a great way to generate extra money even from lower rates. Compound interest builds up the more times you compound – if that makes sense – which means, of course, it’s a great idea to save year after year.
You could also think about placing £10 a day into the stock market. Even over the last decade, following financial crises, there has been an average return of just under 7%. Over 50 years, the average return is 10%. That’s a fairly safe bet to go on – though you’re going to need to keep an eye on your portfolio.
How Do I Afford £10 per Day?
Not all of us has £10 to spare per day. So how do you free up this amount of cash, or how do you generate it? There are a few ways around the puzzle, which are going to require a varied amount of work on your part.
Affording £10 as a base amount to save each day shouldn’t be difficult if you take into account your regular spend. Make a note of everything you pay out each month. Work out how much of it, if anything, you could stand to cut back on. Are you still using that gym membership? When’s the last time you used Netflix? If it’s money going nowhere, it’s money you could be saving.
Add up everything you could cut back on and divide it by 30. This should give you a rough figure that you should be able to save per day. Even if it’s less than £10, it’s a start. Put that money in a savings account and watch the interest pile on top. In years to come, this should put you on the road to making that cool million.
Increase Your Income
Another great way to increase what you save is, of course, to boost your income. But how do you do that? It’s not all about asking for a raise at your current job. While that might be worthwhile doing, there are also plenty of other channels you can follow.
- Look at job opportunities – you may be able to earn more elsewhere with your skillset and experience. Put yourself out there and make people notice you.
- Consider doing jobs online – designing logos, writing blog posts, answering emails – there are plenty of freelancing sites out there which can help you find genuine work from home jobs.
- Sell your old stuff – we all have plenty of bits and pieces we like to keep around, but you could be sitting on a goldmine. Head to eBay and see what you could get!
- Try online offers, surveys and paid deals – there are lots of profitable sites where you can share your opinions and try new products for cash rewards. It takes time, but it’s worth it in the long run.
Earn More Than You Spend
Earning more than you spend is all about keeping an eye on what goes out at all times. You may well start earning more money, but you might find that you’re spending even more. This is why you should always check your regular expenditure. As mentioned above, even knocking a few regular payments off your schedule should free up some cash.
Earning more than you spend will allow you to live off a base amount and put the rest into savings and/or investments.
Start Investing as Early as Possible
This is a golden rule. Sometimes, it’s easier said than done. However, before you have too many commitments which you need to pay out for each month, it’s wise to invest what little cash you have in savings or stocks.
It pays to start investing in your 20s, or before you have a family and other commitments of your own. If investing is completely alien to you then read the as many of the best investing books for beginners that you can. Therefore, you will at least have a good stock of money available should you need to pay for anything particularly major as and when the time comes.
Have a Plan
Ultimately, you’ve got to have a plan. No matter where you are now, and no matter what your financial prospects may be, you’re not going to get to become a millionaire unless you start thinking about where your money’s coming from, and how you’re going to spend it.
Living from day to day or week to week simply isn’t feasible. Not least, of course, if you intend to make a million before you retire. Start chasing opportunities and start looking at ways to make your money travel that little bit further. If there are minor payments you could cut back on, it’s worth sacrificing them now in the name of investing in your future. A cool million is in your sights – chase it!