7 Tips To Retire As A Millionaire
As children, it's safe to say we all wanted to grow up to be a millionaire - buy a big house, and a flashy car and never work... alas, as we grow we understand the complexities of life and that dream seems so far away. But how can you retire as a millionaire? Learn more in our guide
Speak to a specialistDo you dream about becoming a millionaire?
With the odds of winning the lottery a less-than-optimistic 1 in 45 million – it’s safe to say you’ll need another way of reaching seven figures.
But no need to give up just yet. That’s because if you’re willing to commit to the cause, reaching millionaire status by retirement age, if not sooner, can be achievable.
Here at Holborn Assets, we’re on a mission to inspire your financial growth journey. Whether you’re early on in your career or heading towards retirement, a better financial outlook is always possible with the right strategies in place.
We’ve compiled the top 7 tips to retire as a millionaire to show you what your transformation to millionaire status could involve.
In this article
- 1. How To Become A Millionaire? – Start With A Plan
- 2. Let Compound Interest Work For You
- 3. Consider Starting A Business
- 4. Pay Attention To Taxes And Fees
- 5. Live Below Your Means (Become A Conscious Spender)
- 6. Be Careful Where You Get Financial Advice
- 7. Stick With Your Plan Until The End
- How To Become A Millionaire FAQs
1. How To Become A Millionaire? – Start With A Plan
Similar to wanting to change your physique – it’s not enough just towant to get fit. Instead, you need to make the effort to train at the gym and change your diet.
Your finances work in exactly the same way, in that you’ll need to outline what you want to do, along with steps of how to make it happen. This is going to be your framework which will propel your vision into your eventual reality.
If you’ve never worked with a financial adviser before, it can be a really insightful process. The aim is to highlight anything you’re doing now that’s helping you reach your financial goals. Plus, tell you about any opportunities that are being missed to maximise your wealth and your money in investments.
Over time, reviewing your retirement plan will make sure you’re still on track to reach your financial and savings goals. So whether this is to become a millionaire or even a multi-millionaire having a plan is essential.
Discover 💡: Are you a HENRY? (High Earner, Not Rich Yet) – You could benefit from our financial advice
2. Let Compound Interest Work For You
Compound interest can best be described as earning ‘interest on interest’.
Example: You invest $10,000 and continue a monthly contribution of $500 over a period of 30 years with a 5% interest rate. In 30 years, this would give you $441,852.51.
While currencies may vary around the world, it’s clear to see that compound interest can be an incredibly lucrative form of passive income. Compound interest could potentially be one of the biggest drivers of your millionaire retirement fund, too.
The key, of course, is to make wise investments or mutual funds, along with investments that you allow to mature over time. While the economy and stock market have always been subject to peaks and troughs, long-term investing typically provides good and predictable investment returns.
A well-diversified investment portfolio and informed asset allocation can mitigate the risks of stock market ups and downs, meaning over time you’ll grow this into a profitable retirement portfolio, allowing you to have a comfortable retirement.
Read more: How Do I Grow My Pension?
3. Consider Starting A Business
Any extra source of income you can generate is going to get you closer to your financial goals.
These days, it’s never been easier to start a business or find sources of passive income. The rise of AI technology is a notable example here, as opportunities are springing up everywhere to automate many time-consuming processes.
Therefore, it’s definitely not the case that you have to invest lots of cash to start a business anymore. While property remains a good option for funding your retirement, there are lots of ways to make money from a business which don’t require an upfront investment and could boost your wealth with a healthy annual return.
4. Pay Attention To Taxes And Fees
Don’t let your hard work go to waste due to inefficient tax strategies and other avoidable fees.
The saying goes – ‘a good accountant will actually save you money’, and the same is true for all aspects of your finances, too.
Tax can be a complex matter to understand. If you’re a higher earner or an expat, these complexities grow further still. However, expert input could help with your asset allocation and potentially save you a significant amount which you can use to grow your millionaire fund instead.
Worried you’re paying too much tax? Check out our Tax Planning and Wealth Management services.
5. Live Below Your Means (Become A Conscious Spender)
Warren Buffett famously bought his home for $31,500 in 1958 and still lives in the property to this day.
In a CNBC Money article called ‘Why these 5 billionaires still drive these cheap cars’, Buffett also explained how he only drives old used cars.
Quite simply, there are so many ways to waste money, especially on things which depreciate in value quickly. Likewise, growing your income but continuing to improve your standard of living doesn’t always make financial sense. After all, living paycheck to paycheck is risky for anyone, even if they are a higher earner.
So the question to ask yourself is, ‘Do I really need that new phone? Do I need a sporty car? Do we need to go on this expensive holiday?’Life is for living, but if you can make small adjustments and spend below your means, you will accumulate wealth faster. This means cutting down on spending frivolously on credit cards or taking out loans to cover these luxurious expenses.
By living below your means you will save more cash. This money can then be saved or invested to fund your retirement. Or to reach millionaire status sooner.
6. Be Careful Where You Get Financial Advice
In today’s world, you only have to watch a YouTube advert to be given investment or ‘get rich quick’ advice. Even though you didn’t ask for it!
But what would happen if you were to actually follow this advice and it didn’t pay off, or worse still, it turns out to be a scam?
Listening to the wrong people is one of the easiest ways to derail your journey to becoming or retiring as a millionaire. Not only is unsolicited advice often unqualified advice, but a lot of people try to attract your attention for the wrong reasons.
In contrast, by sticking with expert regulated advice (for your applicable jurisdiction) your decisions can be made far more soundly.
7. Stick With Your Plan Until The End
Remember the plan you created at the start?
Once you see your investment, business and money-making strategies start to pay off, it can be tempting to cash in on that money.
But wait! You’re not there yet. You made your plan at a time when you were likely unhappy with your current financial position and craved a change. It’s important to keep that sense of commitment and discipline – even if you’ve reached your initial goal.
Sure, your retirement plan may need to be adapted over time and you may have to amend your pension contributions and combination of stocks over time, but just don’t ditch having a plan altogether. Otherwise, it’s difficult to avoid bad moves which could land you right back at the start again.
Remember, your plan isn’t just there to make you a millionaire – it represents financial security, a nest egg for your future, emergency funds in case the worst were to happen, a proper plan to mitigate risks and weather tumultuous storms.
By following these steps, you could end up with a million-dollar portfolio, providing an exceptional amount of money for retirement and the coveted millionaire status you’ve been dreaming of – how to retire a millionaire.
How To Become A Millionaire FAQs
Growing your wealth is always a smart move, especially if you are looking to secure your retirement.
Many people have questions about the process of becoming a millionaire, so we’ve answered some of these below.
A piece of research was carried out by AJ Bell, which found that by consistently investing £78 a month into an ISA starting at age 22, the retirement fund by the age of 65 would reach £1 million.
While there are no guarantees, many investment options can generate incredible results, especially if you start early and are consistent with your deposits.
If you’re later on in your career, a retirement expert can suggest alternative investments or income sources that could also offer healthy results for your portfolio.
No two people’s retirement plans are the same. For some, £1 million would be more than enough to maintain their current lifestyle throughout retirement, including paying for any healthcare or care needs. In other cases, £1 million wouldn’t be enough. So the answer to this question should always be an individual one.
Have a solid plan which you stick to in terms of investments and savings strategies. If you’re not sure where to start, speaking with a financial planner can suggest some suitable options to boost your portfolio.
The short answer is now, especially if you have no retirement fund or plan in place. The earlier you start investing for retirement, the more likely it is that your retirement goals can be comfortably reached.
Millionaires can retire at any age depending on their preferences. Some HNWIs choose toretire early and enjoy their wealth. Though, some also choose to keep working either to the standard age of retirement or later.
10 million dollars (or any monetary amount) can certainly last for a lifetime. The key is good financial planning, which looks at the amount of money you have versus your expenditure.
No. In the UK, the average retirement savings stands at just £61,897. Furthermore, 17% of Brits have no private pension fund. This is according to data byMoney Nerd.
So wherever you happen to be based, striving to retire as a millionaire will put you in an excellent position, especially if you’re able to follow the above steps to reach your goals.
Holborn Assets – Award-Winning Financial Planning & Retirement Planning Services
Are you ready to put the above steps into practice?
Holborn Assets is an award-winning financial advisory group.We provide wealth management services to our clients across 18 global locations.
For any help or advice with anything we’ve mentioned above, send us a message and our team will be in touch shortly.
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