5 Things I’m Doing Now So I Can Retire As A Millionaire
- I didn’t start saving seriously until I turned 30, but now I’m very excited about retiring from the wealthy.
- I try to keep my credit card debt and spending to a minimum so that my net worth continues to grow.
- I also diversify my portfolio, contribute regularly to my SEP IRA, and research passive income.
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Having spent most of my twenties contemplating the idea of saving for retirement, I found myself thinking about my future financial plans very differently in my early thirties. Not only do I work hard now to save for retirement, but I’ve become obsessed with figuring out ways to retire early as a millionaire.
I’ve become so eager to spend the rest of my income earning years making smart financial moves that I can comfortably do so when I retire. More than that, I want to retire as a millionaire so I can live in a few different places, invest in interesting businesses, and not have to worry about sticking to the kind of budget I’m on now.
While I’m constantly learning, researching, and implementing tips to replenish my finances, here are the five main things I’m doing right now so I can retire wealthy.
1. Reducing credit card debt
After falling into some credit card debt in my twenties, I vowed to be more strategic about how I spend my money and how to plan for both big purchases and emergency pop-ups. In order to hit my huge savings goals and monthly contributions to my retirement fund, I need to make sure I don’t take on any outstanding credit card debt.
To do this, I put the rules in place. For example, I have a few credit card free days during the week where I only pay with cash. I also unlinked my credit card from my favorite online stores, so I can’t take advantage of any quick buys.
I also made contributing to my emergency fund a monthly task so that I would have to save cash if something unplanned and costly happened in my life.
2. Commit to my pension contributions
It wasn’t until I was about to turn 30 that I decided to take my retirement fund contribution seriously. Since then, I’ve done my best to make regular contributions to my SEP IRA, prioritizing putting money into this account and budgeting for it on a monthly basis.
While the income I get as an entrepreneur varies from month to month, I want to work towards increasing the amount I invest in my retirement fund by at least 15% each year. Doing so will help me take advantage of compound interest, which makes the money grow faster.
3. Diversify my investments
In addition to my SEP IRA, I’m starting to work on diversifying my overall investment portfolio. Over the past few years, I’ve been putting cash in the stock market, in index funds and mutual funds, buying cryptocurrencies and NFTs, and starting to learn more about investing in real estate.
The biggest financial mistake I made was keeping large amounts of cash in my savings account. By investing more of this money in investments, my money has a chance to grow exponentially year after year.
For example, the stock market has returned an average of 10% annually for the past 50 years.
4. It monitors my spending
When I stripped my money and money-spending habits in my twenties, I realized that in order to grow my portfolio and retire as a millionaire, I needed to stick to a budget.
Last year, I set how much I allow myself to spend for the month and track purchases on a weekly basis (I keep it simple and track this with a homemade Excel spreadsheet). If I spend one week too much, I rearrange my weekly budget to spend less so I can meet my savings goal for the month.
This has dramatically changed my financial mindset and allowed me to be more strategic in how I spend money on a daily and monthly basis.
5. Increase passive income streams
According to the IRS, the average millionaire has seven sources of income. As an entrepreneur, I’ve worked with myself for the past seven years, I’ve had to find ways to continually monetize in different ways (from products to services, from coaching to speaking posts, from freelance work to selling online courses).
While most of these income streams involve playing an active role and therefore difficult to scale, I have begun to explore additional ways to bring in income that is not related to my business.
For example, some millionaires say they make their extra income through real estate investments, dividend income from owning stocks, or through
From the sale of the assessed assets.