What things can I do in my 20s to become a millionaire by 30?

What things can I do in my 20s to become a millionaire by 30?

Alberto Favaretto, I am interested in accumulating and growing wealth

Answered Thu

Your mileage may vary but this is how I recommend you to do (the earlier you start, the better):

A. First: drastically reduce your expenses

1. Sell all the stuff you do not need (TV, Xbox, etc.).
2. Do not do shopping for the sake of doing it.
3. Do not smoke, drink alcohol, do drugs, etc.
4. Remove the Facebook, Instagram, Twitter, Pinterest apps from your iPhone so that you can only access them via your desktop computer (you will automatically reduce your wasted time by at least 90%).
5. Sleep 8 hours a day, consistently.
6. Meticulously decide whether you really need new stuff to buy.
7. Learn how to do your own taxes. Once you learn how to do your own taxes, you can get an accountant (and be able to check what is he/she doing with your tax filings).
8. Ditch fake friends, high maintenance girlfriends/boyfriends, and all other people that actively undermine your efforts.
9. Never do food shopping when you are hungry. Buy in bulk. Learn how to cook your own meals (do not eat outside). Limit red meat if possible, and prefer beans and vegetables instead.
10. If possible, use the public transport or a bike. As a consequence, ditch your car.
11. Do not change your iPhone every year.
12. Always pay your credit card in full at end of every month. Avoid loans and credit (i.e. paying interest to fuel expenses) like plague. If something costs too much, you must come to terms with the fact that you cannot afford it: move on. We do not need 99% of the stuff for sale out there anyway.
13. Get a good health insurance with above-average coverage.
14. Be curious about the world out there. Try to read as many books (especially non-fiction) as humanly possible, especially in sectors out of your normal studies.

B. Second: drastically increase your income

1. Study Game Theory before looking for a job.
2. Study and understand what are the business niches where based on your skills you can get a better paying job that does not send you to mental hospital. Relocate abroad if necessary. Do not be scared. Learn different and rare skills, go to far away places where specialized workers are scarce, be available to do risky jobs that your peers are not willing to do.
3. Learn how to solve problems at work. While everybody at work just does barely “enough”, you will quickly become essential as one of the very few who solves problems (nobody normally does it). This works even if you are fat, ugly, inexperienced, old, young, whatever. Those that solve problems are golden nuggets in any business environment.
4. Once you become one of the few “essential” employees, you will employ Game Theory to force your employer to give you a better salary, better bonus, etc. Do it nicely but effectively. With a smile, you will be able to put your employer into a so called “dominated” game where the only possible outcome is for you to get a better salary. If you do not get a better salary, find a better job.
5. Immediately set up an emergency fund in cash of approximately 6 months of salary (3-months if you are particularly good at avoiding emergencies).
6. Open a Stock Account with your bank and every month save 20%/30%/40%/50% of your income and invest it in a S&P500 ETF by Vanguard (like “VOO”, google it). Never touch this investment for at least the next decade. Save merciless and invest every month “no matter what”. Google: “dollar cost average” + “compound interest”. This will do marvel to your sleep and to your income as long as you will be consistent, patient and NOT touch your investments for a decade or so.
7. Once you have 200k/300k USD invested in a Vanguard ETF like VOO and they are pumping approximately 30k USD a year as compound interest (which you are NOT touching at any cost), you are able to focus your attention in order to start a side business to corroborate your income.
8. Work at night, on weekends and holiday to kickstart your side business.
9. Focus on getting the first 3 customers for your new side business (friends and family do not count). Once you make 3 customers, focus on how to make 30. You will shortly start making a profit of 1.000 USD / month from your side business alone. If in 3 months you are not able to reach the 1.000 USD / month threshold focus on finding better cash-flow generating business ideas. Learn from your mistakes (you will do many). Take low hanging opportunities that others don’t see.
10. Once your side business starts making 10k USD / Month you can start evaluating if your current salaried job is worth the effort / time / hassle. If not, make the jump to the self-employed world and focus on increasing the income from your side business to 30k USD / Month.
11. Sooner rather than later you will be a millionaire. The first million is by far the absolute hardest.