This week, I’m talking about how to become a millionaire. The vast majority of millionaires in the United States did not inherit their wealth, but rather, achieved millionaire status from strong habits and good decisions. 

Today, I’m talking about the most important habit of millionaires - paying yourself first. In other words, millionaires make sure that they set aside money in savings and retirement accounts before they spend their income on eating out, or even before they pay their mortgage and their other bills. 

This is the exact opposite of what most Americans do. Most people pay everyone else first, and pay themselves last. When all you get is the scraps and leftovers, it’s much harder to build wealth. It also leads to inconsistent savings habits. Some months you might save and other months you don’t. Then your retirement and financial future is left to chance. 

Millionaires understand how important it is to save early and often, rather than throwing money away keeping up with the Joneses. It’s not difficult to become a millionaire if you understand this. In order to build wealth, you must have this habit. I’ve seen clients who have very high incomes but very little wealth because they didn’t follow the pay yourself first rule. 

Even with an average income during your working life, you can still become a millionaire by following the rule of paying yourself first. Here’s why: 

I ran the numbers, and if you saved just $3,500 a year starting at age 25 to retirement at age 65, you would be a millionaire at retirement, assuming your investment grows at 7% a year. If you were able to set aside $10,000 a year for retirement in that scenario, you would have about $3 million at retirement. 

The good news is that if you have a 401k or similar retirement plan through work, you’re already paying yourself first. 

But, if you are currently paying yourself last, you can flip the switch by setting up automatic transfers from your checking account into your savings and retirement accounts. Setup the auto-transfer within a couple days of your paycheck hitting your bank account. It’s a simple way to make sure you pay yourself first, and pay yourself consistently every single month. 

That’s it for today. Tomorrow I’ll be discussing how baseball can help you become a millionaire. Yes, baseball.

Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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