How to Save a Million Dollars

by Maria O'Brien ; Updated July 27, 2017
Save $1 million

It's easy enough to save a million dollars if you come into a large inheritance, win the lottery or strike oil on your property. It's a great idea to simply stick one million of your windfall into the bank. Yet, it's not that simple or quick for most of us. Don't let that fact discourage you. It is possible to save this much money over the course of your lifetime. You can even do so within a decade if you are careful with your money. Yes, you can save a million dollars with a bit of forward thinking and some financial restraint.

Step 1

Spend less than what you earn. This is the fundamental principal of personal financial success. No matter how much money you make, you can blow it all if you don't make a conscious effort to spend less than what you earn. Socking the difference away in savings and investments can make all the difference.

Step 2

Diversify your income sources. Keep your income high. Insure yourself against job loss by creating multiple sources of income. In addition to your primary job, consider consulting on the side, working a home-based business or getting a second part-time job. Save all of your secondary income, and put it into interest-bearing accounts or investment vehicles.

Step 3

Establish and maintain residual income and semi-passive income sources to free up your time to make more money. Consider buying and renting out apartments, or perhaps start a business that can be outsourced in large amounts.

Step 4

Set goals for your savings, and track your progress each month. Challenge yourself to save money that you would otherwise spend on things you don't really need. Watching your progress each month can really inspire your efforts.

Step 5

Continue to earn, save and invest your income over your working years to save a lot of money. How hard you work, how dedicated you are to saving and how successful you become financially can add up to a million dollars before you are thirty, forty or fifty. Perseverance is your biggest asset in this journey.

Tips

  • Take advantage of employee matching programs for your 401k. Donate money to charities to give back to others in need. Try social lending (peer to peer lending) as a way to earn money and help others simultaneously.

Warnings

  • Don't give up or spend frivolously when you'll regret it later. Don't deprive yourself or your family by being miserly with your money--enjoy life and help others as you continue to save up.

Photo Credits

  • www.sxc.hu
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