“Focus on where you want to go, not where you are” – Anthony Robbins
Are you planning to become a millionaire before hitting the age of 45? If yes, that’s great, girl! At first, it might seem difficult to you. Especially, if you are a single mom, planning to become a millionaire by 45 might be a distant dream.
But with the right mindset and focus towards building wealth can help you to become a millionaire mom before turning 45. Here are some of the best possible ways you can follow for financial independence. Let’s start!
Start saving money early
The baby step to becoming a millionaire before 45 is starting to save money at the earliest opportunity. At the same time, you have to invest your money in an appropriate way. This is also an important step in building wealth as a single mom.
Eventually, you can earn compounded interest. That means your interest is earning interest. So, the earlier you save and invest your money, the more your money can grow!
You can also stash your money in a high-yielding savings account. Usually, you will find these types of accounts in online banks like Ally, Chime, etc. They offer comparatively higher interest rates than that of brick-and-mortar banks.
Pay off your high-interest debt(s)
Your goal of building wealth can be compromised if you have any debts. And especially, the unsecured debts like credit cards!
The incessantly high-interest rates can be an obstacle to your financial goal. Besides, using a credit card might lure you to spend more than you earn.
Don’t let the high-interest rates grab a large share of your paycheck every month. This turns out to be an obstacle to becoming a millionaire before hitting the age of 45. So pay off those high-interest debts quickly.
Expand your income sources
Only working a usual 9 to 5 job won’t help you to become a millionaire before 45. Buddy, you need to think big! Multiple income streams are the key to financial independence.
Your full-time job might help you generate income to invest. But if you want to become a millionaire mom, you need to do some side hustles for an extra income. Yes, you heard it right!
Maybe after some time, your side hustle income will generate more revenue than your regular job. Look for business ideas that cater to your area of interest.
Here are some side hustle ideas which you can try, like:
- YouTube Video Host
- Zumba instructor
So, don’t wait! Engage yourself in a side hustle and pave the way to becoming a millionaire by 45!
Follow the 50/30/20 budget
Are you still following the traditional budgeting method? If yes, then what about trying a new budgeting method?
Well, I am talking about the 50/30/20 budget rule! It can help you earmark funds once you get your paycheck!
Allocate 50% of your income to your needs like groceries, rent, utility bills, etc., and 30% of your income goes for your “wants”. It includes going to restaurants, mobile bills, movie dates, fancy clothes, etc.
But I believe the most important part of this budgeting is allocating 20% of your income for savings! Save on your emergency fund, retirement, and invest to build your wealth!
If some dollars in your necessary and luxurious expenses remain unspent, you can dedicate that money to your savings as well!
Live within your means
“Rich people stay rich living like they’re broke. Broke people stay broke by living like they’re rich!”
If you’re living with a motto of “treating yourself”, it can lead you to unnecessary debts and liabilities!
You might be enticed by the things you want to have. You know what? That’s quite normal! After all, you work hard and might think that you deserve to buy those things!
Many people fall prey to these temptations and use credit to purchase what they want. And ultimately, they end up being debt trapped!
So, if you want to be a millionaire by 45, you have to live within your means. Only buy the basic things you need in your life. And focus on what you can afford! If you need something which is not affordable right now, save money for it before you buy it!
It might be harder during the initial months. But once you start saving money by changing your lifestyle, you will feel good!
Invest your money in various ways
You need to start putting in dollars into a 401k right away! Plan to make the highest contribution possible.
Invest your account in equities. What does it mean to invest in equities? That means you are purchasing shares of a company’s stock in the stock market. It can give you an annual return rate of about 10%. In fact, it has been the average return rate on the S&P 500 for the past 90 years!
If you are self-employed like a freelancer, you can opt for a solo 401k. But you have to own a business without any employees.
You can contribute up to $57,000 in 2020 as a solo freelancer. As an employee, you can contribute up to $19,500 in 2020. It can be more if your employer offers a matching contribution.
And as the employer, you can make an extra profit-sharing contribution of 25% of your net self-employment income (gross income less allowable deductions for that business).
Next, you can invest in an ETF(Exchange-Traded Fund). You can describe an ETF as a basket of securities like stocks, bonds, commodities, etc. that you can buy and sell through a broker. Usually, ETFs are cheaper than mutual funds with an average expense ratio ranging from about 0.30% to 0.90%.
ETFs don’t have minimum investment requirements like mutual funds. You can purchase as little as one share!
So, what are you waiting for? Start planning to build your wealth at the earliest. And become a millionaire before turning 45!
Valentina Wilson is a personal financial blogger. She loves to analyze personal financial matters and help others manage their finances in a better way. Traveling is also her passion. She loves to travel and explore different places by herself.To connect with her, go to her Facebook | Twitter or visit Bestdebtconsolidation.org
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Great tips! The income component is very important. You will never become a millionaire by skipping your morning latte. Earning more income is key!