Over a million Americans became millionaires last year.  Here's how to become one yourself
Over a million Americans became millionaires last year.  Here’s how to become one yourself
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Are you ready to join this awesome club?

Key points

  • A good 1.3 million Americans became millionaires in 2021.
  • A strong stock market and heavy crypto gains have been major contributors to this trend.

Have you ever dreamed of becoming a millionaire? Even if it was something you thought about as a kid, chances are it crossed your mind at least once.

It is natural to think of millionaires as an elite group with few members. But in reality, at the end of 2021, there were a good 14.6 million millionaires in the United States, according to wealth research firm Spectrem Group. Last year, an impressive 1.3 million people joined the millionaires club.

On the one hand, that’s surprising given the impact the pandemic has had on so many people’s finances. On the other hand, it’s no secret that low-income people were more likely to take a hit during the pandemic than high-income people.

Additionally, the stock market, despite a brief dip in the spring of 2020, has had two solid years. This alone has helped many people build a large amount of wealth in 2021.

Strong returns in the cryptocurrency market also contributed to more millionaires last year. By the end of 2021, the total market capitalization (i.e. the total value of all mined coins) of crypto assets has grown to over $2.3 trillion, representing a gain of 1. 5 trillion dollars.

If you’re interested in becoming a millionaire (because really, who isn’t?), you should know that it’s not just a matter of luck. There are steps you can take to put yourself on the path to a net worth of $1 million or more, like these.

1. Live below your means

To grow your wealth, you will need to spend less money than you earn. It’s so simple. The sooner you get into the habit of living below your means, the more likely you are to become a millionaire.

If you find it difficult not to spend all of your salary, it can be useful to set up an automatic transfer where a portion of the money is transferred from your checking account to your savings account each month. Following a budget can also help you control your spending.

2. Stay away from high-interest debt

High-interest debt, like credit card debt, can cost you money in the form of accrued interest. If you’re spending money on interest, that’s money you’re not saving and investing.

It pays to keep your credit card balances to a minimum – or better yet, avoid having one at all. Building an emergency fund could save you from relying on credit cards when unexpected bills pop up.

3. Invest money you don’t think you’ll need for a long time

Money that you don’t spend month after month shouldn’t sit in a bank account with minimal interest. Instead, you will need to invest it if your goal is to become a millionaire.

Now, for this purpose, you have different account options and choices. You will receive tax benefits if you open an IRA and invest money in it. Or, for more flexibility, you can place your investment dollars in a regular brokerage account.

When it comes to choosing the right assets, a lot of people have become extremely wealthy by putting money into crypto. But there are a lot of risks in going this route.

If you don’t have an appetite for crypto, a better bet may be to load up on a bunch of different quality stocks or broad-market ETFs (exchange-traded funds). Although the stock market can be volatile like the crypto market, the fact that stocks have been around for much longer can make you more comfortable investing your money in them.

Most people don’t snap their fingers and become millionaires. If that’s one of your goals, with careful planning and some sacrifice, it can be done. But the earlier in life you commit to it, the more likely you are to succeed.

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