Simple Plans Create Millionaires

3 Minute Read

Anytime you want to accomplish something big in your life, you need a plan to make it happen. Want to build a house? Get a plan. Want to start a business? Get a plan. You get the picture.

The same thing applies to becoming a millionaire. With the right plan and the commitment to stick to it, you can become a millionaire—even a multimillionaire!

Simplicity is the Secret

The first step is to contribute to your 401(k) or employer-sponsored retirement plan. Most employers will match your contribution as a percentage of your pay. For example, if you contribute 4% of your salary and your employer matches that, you've already got a 100% return on your investment!


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Next, open a Roth IRA. As long as you have an earned income, you can contribute $5,500 each year. If you're married, you can contribute $5,500 for each person, even if one of them doesn't earn an income.

Your goal is to invest 15% of your income, so if you make $40,000 a year and invest 4%, or $1,600, in your 401(k), you'll only need to invest $4,400 in your Roth IRA to meet that goal.

In both your 401(k) and your Roth IRA, you'll invest in mutual funds with a long track record of above-average returns. Put 25% of your investment in each of these four categories: growth, aggressive growth, growth and income, and international funds. Learn more about Dave's easy-to-understand investing philosophy.

Commitment + Time = A Million-Dollar Plan

The third step is simply to wait. Continue to make your contributions whether your funds are up or down, and don't take your money out for any reason. The market has grown at an average annual rate of 12%. We'll assume your investments will do the same.

A 30-year-old who follows this plan will have nearly $6 million by the time he's 70, without ever increasing his contribution level!

$240,000 in contributions (not including 401(k) employer match)
+ $5.7 million in total interest
$5.9 million for retirement

The best part about this plan is that it works for nearly everyone:

  • If you make more than $40,000, max out your Roth IRA limit, and still haven't reached your 15% investment goal—no problem. Invest the remainder in your 401(k).
  • If you don't have a 401(k) where you work—no problem. Go straight to the Roth IRA.
  • Don't have 40 years for your investment to grow? No problem. A 40-year-old who follows the same plan will have $1.7 million when he's 70.

Just Get Started! Now!

A great plan, even a simple one, can benefit from great advice. Dave's investing Endorsed Local Providers (ELPs) can help you get your plan rolling by giving you the same advice Dave would. Contact your ELP today!

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