Is it possible in this day and age to become a millionaire?
Or perhaps the better question is why would you want to become a millionaire?
I mean in media today Millionaires and billionaires for that matter are often not depicted in
the best light.
Characters like Scrooge McDuck or the always supremely evil C. Montgomery Burns come to
mind here.
And of course right now in real life we have the ever-present Donald Trump as one of the
main poster boys of the super wealthy.
So I suppose with that kind of media influence hovering over us our entire lives it's not
surprising that most of us have a fairly negative view of the super wealthy and many really
do not want to become a part of it.
Especially since the majority of us don't personally know anyone who's Super Rich so
we don't have anything to really balance the scales, and that's all we can really draw
upon is what we see in the media.
And that's really unfortunate because there's a lot of really great wealthy people out there.
But most of them are not in the public eye and even the ones that are in the public eye
like Bill Gates don't get as much media attention as someone like donald Trump does.
And as a result there are a lot of misconceptions about millionaires and the wealthy in general.
Hey guys, Daniel here from Next Level Life and it recently occurred to me that I’ve
been neglecting a huge part of what it takes to have that next level life that we all dream
of… because whatever your dream life is, you need to have the finance resources in
place first to be able to live it.
So with that in mind I’m going to be starting this new series on my channel covering various
topics in the field of personal finance.
And as you can see by the title for my first video of the series I wanted to talk about
a simple plan that, if stuck to, will practically guarantee your future millionaire status as
well as take a moment and really define what a millionaire is and is not.
Because believe it or not even for the average American it is possible.
No you know what possible is too soft of a claim because it's more than possible.
In fact if you follow a few simple steps it's almost guaranteed.
Don't believe me?
Well hopefully over the course of this video as well as the rest of my personal finance
videos that will be coming out soon I'll be able to convince you.
So without further ado, let's get started.
What is a millionaire?
A millionaire is simply someone who has a million-dollar positive net worth.
Meaning after subtracting debts and other liabilities and expenses they have a million
dollars worth of stuff leftover between their cash their house and all their other assets.
That's really all there is to it.
It has nothing to do with how much money you make.
It has nothing to do with what type of person you are or how well-known you maybe, it simply
means that your assets are valued at least 1 million dollars greater than your liabilities.
But how can the average American get to that $1000000 positive net worth in their lifetime?
I mean $1000000 that's 6 zeros, i'd imagine that most of us have never written a check
with more than three zeros.
Unless of course you bought a new car or house with cash and if that's the case kudos to
you, you may not even need this video because you're already probably well on your way to
that million-dollar net worth.
Now I said that if you follow a few simple steps it's not only possible to reach that
million-dollar marker, it's almost guaranteed.
Let's find out how.
Well I did a few calculations and found out that over the course of the last 40 years
the S&P 500 has returned an average of 8.6 percent per year not including dividends.
Now technically speaking past results are no indicator of future returns, but until
we see the future returns this is the best we've got to go off of.
So assuming that over the next 40 years the market does roughly the same as it did since
1978 you could invest $261.03 per month over the next 40 years and become a millionaire.
Again assuming no dividends.
Now 261 dollars may seem like a lot but when you break it down it's not even $10 a day,
and there are lots of ways to save money.
You can cut cable, or go down to a lower internet speed, or not eat out quite as often, or use
coupons when you're shopping for groceries, or you can do none of those things and instead
find a way to make a little bit of extra income.
Maybe you start mowing lawns or shovel and driveways on the side, maybe you start selling
old clothes that you don't need anymore online, or if you're young you might be able to start
teaching people how to use social media better.
You'd honestly be amazed at how many people would pay you to do that.
There's a ton of options out there, all you have to do is pick the one or maybe few that
work out the best for you and start your own Journey on the path to becoming financially
independent.
Now there's a couple of things that I want to clear up before ending the video for those
of you who are a little bit more Analytical in nature.
That 8.6 percent is the geometric mean rate of return that the S&P 500 has had since 1978
according to Yahoo finance.
All I did to get it was go through each year and look at where the market was in September
because as of the recording of this video September just ended.
Then I put them all into the Excel spreadsheet and calculated the return.
And I think the reason why we hear so many different rate of returns thrown around by
Financial gurus is because of the inflation effect.
I've heard gurus say that you can expect to earn anywhere from 6 to 10% per year in the
market.
And depending on what time frame and type of average you use any of those numbers could
be true.
For example if you go from 1978 and use an arithmetic average the average return on the
market would be about 9.7 percent per year.
Inflation is generally assumed to be about three to four percent so if you adjust for
inflation your realized return would be somewhere in that 6 - 7% range.
If you don't adjust for inflation of course you're at nearly a 10 percent return.
So there you go there's a simple formula to retiring with the amount of wealth that most
of us would consider to be rich.
I hope you enjoyed the video and if you did or if you learned something be sure to like
And subscribe I've got a lot more of these Finance coming out in the near future as well
as some more book summaries including one on David Bach’s book entitled the Automatic
Millionaire, which might be a good one to check out if you haven’t already and you’re
struggling to save money.
But with that being said, thanks for watching and have a great day.