How to become a millionaire on just a few dollars a day

When you think about your twenties and money, what comes to mind?

Student loans. Entry level jobs. Frequent travel. Eating out. Drinks with friends.

Many of my coaching clients are young, in their 20s or early 30s. And many of them have almost no money invested for the future. Now, you might be thinking that they (you) can’t afford to invest because they don’t make enough and they have too much debt. We’ve all heard mass media incite fear in the hearts of people our age. “Millennials will never be able to retire!” “Millennials are being crushed under student loan debt!” “Recent graduates can’t get jobs!”

The goal of this post isn’t to go into all the reasons why those statements are completely misleading and in some ways categorically false. But I do want to tell you that you don’t need a big income to become a millionaire. All you need is time and awareness of how you are spending your money.


Delay investing, pay big time

Take a look at this chart below. With $40 a week, 40 years, and an average annual return of 10% (which is the historical average of the stock market), you can achieve the $1 million dollars mark. If you start at age 25, and invest the same amount every year until you are 65, you will most likely end up a millionaire by the time you hit our so-called official financial independence* age (aka "retirement" - a word I try to avoid using). If you start five years earlier at age 20, you get $1,644,854. Over 50% more! But if you start five years later at 30, well… you end up with only half at $620,103.

Savings by age

Let’s look at the total amounts you personally put in over those 35 to 45 years.

There’s only a $10,400 difference in how much you personally invest when you start investing at 25 versus waiting until 30 - 5 years x $2,080 per year. The same is true from ages 20 to 25 - 5 years x $2,080 per year.

If you wait until age 30 to start investing, spending that $10,400 over 5 years ends up costing you $392,548.

Invest early and automatically

I’ve thrown a lot of numbers at you, so here is the key message. It takes less of your own money to become wealthy the earlier you start. Put another way, waiting to invest costs you substantially the longer you wait.

The math works. So how do you make this work in your life? Simply put, you need to find a way to set aside $5.70 every day - $40 a week - or $173.33 a month - to invest. Starting this week. And every week. In order to become a millionaire. If you set aside $80 a week, you’ll become a multimillionaire.

Here’s my tip for putting this into action. Set up auto-draft from the account your paycheck is deposited into and have $173.33 transferred to an investment account at the beginning of each month. Build your monthly budget on $173.33 less - buy one less item of clothing, go out to eat one less time, scale back on the foodie-type food.  Read more about my budgeting tool conversion experience.

What would you need to give up to be able to save $5.70 a day? Sound off in the comments below.