How to Become a Millionaire By Age (20-Year Olds)

June 26, 2023

How do you get on-track to becoming a millionaire in your 20s? Start by understanding compounding interest, start saving SOMETHING, and invest in yourself to get a career that creates opportunity.

For more information, check out our full show called “How to Become a Millionaire By Age! (2023 Edition).”


So, if you’re in your 20s, right, and this is the way we thought about approaching this: if you’re in your 20s and you want to become a millionaire, what are the three or four things that you need to know? That you have to hone in on to make sure that you’re setting yourself up for long-term success. So let’s jump right into this.

The first thing, the most powerful thing, is you’ve got to understand how compounding interest works. No, I think it was Benjamin Franklin because he’s the one who said it. He said, “Compound interest is the eighth wonder of the world.” It is this amazing, unbelievable, powerful mechanism that can literally be the wind in your sails to building wealth. But the thing is, when you’re in your 20s, you have to figure out if it is going to work for you and actually be your army of dollars. Is it working harder than you can with your back, your brains, and your hands? Or is it going to work against you because you go out there and fake your lifestyle by building up debt that you truly can’t afford? And so we have to reframe the way that our minds work. We’ve already talked about how unique the brain is. Well, most folks, when they think about growth, specifically dollar growth, they kind of think on linear terms. Okay, if I have $500 today, maybe I’ll have $1,000 by age 30, and that $1,000 will turn into $1,500, and that $1,500 will turn into $2,000, and that $2,000 will turn into $2,500. And that sounds exciting to think about $500 turning into $2,500. But in reality, when it comes to compounding interest, the movement is not linear.

Yeah, I think a lot of people, this is a big thing people don’t understand, that your money actually builds upon itself. This is the power of compounding interest. You need to not think linear, you need to think exponential. So that’s why if you can just stay the course, set it and forget it for the first 10 years of investing, I think you’ll be shocked at how big your assets will grow in a compounding way. Yeah, think about how different it is thinking about $500 on a linear term turning into $2,500 versus $500, if you assume a compounded 10% rate of return, turning into almost thirty thousand dollars. That is an entirely different picture. Alright, let’s move on to the second thing that I think 20-somethings ought to know if you want to be a millionaire. You just need to do something. So, we went ahead and borrowed the Nike slogan and said, “Just do it.” A little goes a long way. I know in your 20s you’re broke. You don’t feel like you have a lot of resources sitting around. That’s okay because if you can just take a little bit today, you’ll really have that great big, beautiful tomorrow in the future. In your 20s, the most valuable asset that you have is your time. And because you have so much time, it only takes a little bit of money to do something pretty spectacular. And if you don’t believe us, go to moneyguy.com/resources and download our Wealth Multiplier. It will literally show you what every dollar you have can turn into by the time you get to retirement. If you wonder why we have these koozies, it says this one dollar beer can turn into, it cost me 88, is because that one dollar at age 20 can turn into 88 by the time you get to age 64. Yeah, I think once you know what money can do, you’ll think differently, not only about how you invest your money but also how you spend your money. Because you’ll realize, “Hey, everything that leaves my pocket or everything that leaves my bank account has the potential to be so much more. So, I need to be very serious about how I allocate my resources.”

So, the third thing I would tell someone in their 20s, if you want to think about how to become a millionaire, is to invest in yourself. Now, immediately in the world in which we live, what people hear is, “Oh, that means I’ve got to go get an advanced degree. I’ve got to go back to school. I’ve got to go rack up student loan debt.” And my first student loan debt is not bad. That is not necessarily what we mean when we say “invest in yourself.” What we mean is, figure out how to make yourself an expert and continue to be a lifetime learner that hones your craft, your skills, and your profession.

And don’t get us wrong, you very well might need to go to college. We just want you to be very deliberate, make sure you have a return on investment with whatever you invest in yourself. But the biggest goal here is to make sure you set yourself up to get the best income for your skill set, your knowledge. And that’s why when we talk about ROI on education, we actually set up a rule for you guys. Here’s the general rule: you want to make sure that whatever your student loan debt is coming out of college is less than what the first year anticipated income will be. If you can do that, I think you’ll keep yourself where the debt is digestible, and you can actually pay it off versus feeling like it’s sitting on your shoulders for years upon years.

Because I think a lot of us operate under the assumption that, “Okay, if I go to college and I get this degree, just getting the degree automatically means I’m going to have a job, and that job is going to pay me well for the rest of my life.” Well, unfortunately, what the statistics suggest is that 44% of job seekers with degrees actually regret their field of study and say, “Man, if I could do it all over again, I might not have even pursued that degree, gone into that field of study. I would have looked at something different.”

Well, it gets worse than that. 27% of graduates work in their field of study. If you do the reverse math on that, you quickly see that we’re right around 67%. Actually, 73%—sorry, I inverted the six there—73% of people do not even work in their field of study. Be serious about the decisions and the choices you’re making. So, if you are going to invest in yourself, make sure you understand what it is you are investing in.

Alright, Brian, so let’s talk about the fourth thing, and this is the exciting one. If you want to be a millionaire in your 20s, you’ve got to know your millionaire math. You’ve got to know what is actually required for you to become a millionaire by the time you get to retirement. Let’s jump into the numbers here. First of all, this is pretty exciting stuff. This is what got me. I call it the “morrow money.” Yeah, because if you think about it, for a 20-year-old, if you want to be a millionaire, all you have to do is set up $95 a month. Or maybe you worked in high school and you started saving. If you have that custodial Roth IRA, you can start without adding a dime to it. $11,318 will get it done. That’s crazy for a 20-year-old. I’m going to say this again: $11,000 saved up as a 20-year-old will turn into a million by retirement without saving another dime, another dollar. Power of compounding growth, I’m telling you, it can work for you. For a 25-year-old, $184 dollars a month, $22,708. For a 29-year-old, $302 dollars a month, or $38,249. Still all very doable. Get to work! So maybe you’re saying, “But guys, I’m not 20, or I’m not 25, or I’m not 29.” What you should have right now to be on track to be a millionaire? We actually have a deliverable called “Are You on Track to be a Millionaire?” You can go to moneyguy.com/resources, go download this absolutely free deliverable, and see how much you should have saved today to be on your way to millionaire status.



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