Category: Gig Economy – Side Hustles

Updated April 13, 2024. Many of us dream of a beautiful house that is in a fantastic location, awesome vacations, and millions of dollars in the bank. Many people would like to become millionaires, but few know the steps it takes to reach this goal. Most self-made millionaires got there through hard work, disciplined saving habits, and investing wisely. If you want know how to be a millionaire by retirement, you are about to find out how to do it.

Most people would like to eventually retire and know that they have enough money to live comfortably in their retirement years. If you have already achieved the milestone of having accumulated $1 million dollars, congratulations! I invite you to continue reading this blog as a way to increase your wealth by focusing on developing multiple streams of income.

How Much Money For A Similar Lifestyle?

The big question that so many people have been asking is: how much money is needed to have the same lifestyle in retirement? If you try to research by looking online or talking to a retirement expert you will find that the answers vary widely.

Basically, this question of becoming a millionaire by retirement can be divided into two sub-categories. One: how much money is enough for retirement? Two: how to be a millionaire by retirement?

How Much Money Is Enough For Retirement

The 4% Rule

The widely accepted financial rule of 4% states that your savings should last for at least 30 years without exhausting their portfolio.

Many experts say that your retirement income should be around 80% of your pre-retirement salary. Suppose you make $100,000 a year at retirement. In this example, you would need at least $80,000 to have a comfortable lifestyle after you leave the workforce.

Of course, the $80,000 amount annually can be adjusted depending on your other sources of income, like Social Security, pensions, and other part-time employment. To have the $80,000 necessary, you would need a nest egg of about $2 million dollars. To calculate this using the 4% rule, simply take $80,000 and divide by 0.04. Also, keep in mind that this strategy assumes a 5% return on your investments.

If you are like many adults, you have probably thought of taking an early retirement at some time in your life. If you are thinking about an early retirement, is it possible to retire on $500,000? Let’s do the math. Using the widely accepted financial rule of 4%, the $500,000 will allow you to access $20,000 for 30 years.

If you have saved and invested your money wisely, the $500,000 would last you 30 years, assuming a 4% withdrawal strategy, for $20,000 a year. Say you live to be 85 years old if you are in good health. If you wait until age 55 this strategy could work.

Key Takeaways

• If you retire on less than $1 million it could affect your quality of life.
• Retiring abroad in a country outside the US in a country in South America may be more affordable in the long-term.
• Retiring before you reach 55 years will hinder you from your prime earning years that could potentially increase your Social Security benefits.

Ways To Become A Millionaire By Retirement

Would you like to retire and have the lifestyle that you already have, but you don’t have enough money to make it happen? In my opinion, $20,000 or even $40,000 is really not enough money to live on comfortably even if you live in a South America country. For instance, our family has been living for more than eight years in Colombia, South America, and the value of $20k to $40k is more or less equivalent to $80 to $100k in where we used to live in Charlotte, NC. The $80k to $100k in Charlotte, NC will pay your bills, but many people won’t have the vacation lifestyle that many are dreaming of. 

Who wants to have financial stress in retirement? As we all know, people are living longer in the last century than they ever did before and we need to plan for this to happen as well. If you want to have more sources of income, I have researched some of the best ways that you can increase your cash and have the kind of retirement that we all dream of.

Money Rules To Help You Reach $1 Million

If you are motivated, then follow these rules of how to be a millionaire by retirement:

1. Become financially savvy. Learn as much as you can about money. Read websites and books about saving money, investing, generating multiple streams of income. Every piece of information will help to guide on your quest to become a millionaire.
2. Live like you are poorer than you are. Be careful and frugal about things you buy on a daily basis. Be humble and don’t show off to your friends or on social media. Live in a modest house. Make your meals at home. That way when you do go out to a restaurant you can really enjoy it and also do so on a modest budget.
3. Build an emergency fund. Start by saving a month’s worth of expenses. Then build toward having three to six months. Just be conscious and do not use this money for vacations. This fund can only be used for emergencies.
4. Manage your debt. The less debt you have the quicker you’ll be able save and not have to pay off credit cards and other monthly debt bills. If you have credit cards, many of these have high interest rates. Pay off these credit cards as rapidly as possible. Certain kinds of debt like a home mortgage are necessary and can help you move ahead long-term. The key is to find a house that fits within through budget. 
5. Save daily. Each week contribute to a savings account or a 401(k) account. Try to save at least 20% of your after tax income each year.

Extra Rules To Really Increase Wealth

1. Invest in real estate. Make inflation your friend, not your enemy. Research areas that you are strongly interested in retiring to. My family moved to Colombia, South America. The big cities of Medellin and Bogota are beautiful and they are an outstanding places to retire. You will find that the prices are, by US standards, very reasonable and I could go far as to say cheap if you live in a major city in the US. For example, if the value of a property goes up 3% in a year due to inflation, that’s a 15% ROI. In addition, if you are from the US, take advantage of the ways you can avoid US taxes.
2. Consider utilizing a conservative approach to value investing. If you think of the value stock market investors today, most likely you will think of Warren Buffett. Warren Buffett, chairman of Berkshire Hathaway, and Charlie Munger, vice chairman, are value investors that only invest in a handful of the best value stocks. Take an in-depth look at what many consider to be the best passive income investment stock: Berkshire Hathaway B shares (BRK.B). Warren Buffett and his team and his successors have purchased and are continuously investing in the best value stocks so that you don’t have to. On top of that, Berkshire Hathaway has an incredible record for the last 55 years of 20.3% annual compound interest!  (link)
3. Earn more money. First try to maximize the money that you make in your day job. For instance, ask for a pay increase, work overtime, or consider switching jobs and finding a more lucrative position. Look for side hustles that you can do. This could be anything from driving for Uber or Lyft to selling things online.

Increase Your Wealth

If you are the type of person who realizes that just because you reach a certain age you really don’t want to retire. Maybe you have seen other people retire and watched them lose all their energy. If you are one of these people, chances are you said to yourself, I don’t ever want that to happen to me.

If this is the case, then probably you have an entrepreneurial spirit. Rather than watch your retirement wealth decrease, you see the opposite. You want to increase your wealth in retirement. At Financial Goodness, we are the same way. We are entrepreneurs at heart.

Owning your own business means that you directly reap the benefits of all the hard work that you have put in. When you work for someone else, working harder does not necessarily mean more money in your pocket. As a business owner, you also build equity in your business. You are calling the shots. Basically, you can work on the things that are important and add more to the bottom line and ignore everything else.

Finally, I would like to share with you the millionaire behaviors that are directly from The Millionaire Fastlane by MJ DeMarco. The ideas for starting a business that are listed below are the thoughts and behaviors that you need to have to achieve the millionaire mindset.

Ideas For Starting Your Our Business

• Appliance Repair
• Blogger
• Coach
• Computer Training
• Consultant
• Desktop Publisher
• E-commerce or online seller
• Editorial Services
• Electronics Repair
• Financial Planner
• Freelance Graphic Designer
• Home Inspector
• Import / Export Specialist
• Interior Decorator
• Marketing Copywriter
• Personal Concierge
• Personal Trainer
• Photographer
• Real Estate Investor
• Solar Energy Consultant
• Website Developer
• YouTube video maker

Updated December 3, 2023:

The good news is this: after the COVID-19 coronavirus, the U.S. estimates that people working for themselves will increase to around 40%. What even better is that many of these ideas you can do from the comfort your computer in your home!

The Bottom Line For Success

Many of the steps to becoming a millionaire are not overly difficult. However, they do take hard work, discipline, time, and perseverance. But, it’s the emotional side that prevents many people from reaching the millionaire mark. Perhaps the most important two factors are time and perseverance. Without these two, new ideas and new businesses will struggle and possibly fail.

Make the decision to focus on your goal of how to be a millionaire by retirement and write down your plan of action. With your plan of action of the key steps you will have the confidence needed because you know exactly how to be a millionaire by retirement.

Then put in the work and you will be surprised at how your net worth grows over time from your multiple streams of income. Through the hard work, discipline, and through your preseverance you will be grateful at the end result you and your family have achieved.

Last Updated on April 13, 2024 by Financial Goodness

Financial Goodness

George Alexander Roy III and our team are experts in helping you to seek wealth through investing and tips on how to succeed. Join us at FinancialGoodness.com to increase your knowledge through education in the areas of personal finance, real estate, and investments. George has been an owner of a real estate investment business that focuses on wholesaling, fix & flip, and long-term buy-and-hold property strategies with a consistent increase of annual revenues. Consequently, as an entrepreneur, researcher, writer, and speaker he has sought the truth in everything he does, no matter how difficult. Hopefully this value and service will help each person achieve their financial freedom sooner.