USD 1 million savings! 7 ways to reach your goal!

Table of Contents

How to reach a dream goal of USD 1 million savings?

Do you want to be a Millionaire?……Yes off course! It is still a dream of many Americans to achieve goal of USD 1 million savings, despite being challenged by unemployment, inflation and other economic challenges.

USD 1 million savings can be reachable for all those who are disciplined and focused towards their goal. One needs to implement a consistent strategic approach to reach his or her dream.

If you’re aiming to steadily climb your path toward millionaire status, we have got you all the steps to reach your goal with a practical and feasible approach:

Strategic approach

For reaching your USD 1 million savings goal, you got to have a strategic disciplined approach. As you know the Roam was not build a day! Consistency plays a big role in achievement of any goal if the efforts are taken in a right direction, off course!

You can introspect when your fall in comparison to other Americans going through this survey on personal finances of American households. Also you can refer this FRB report.

1. Start Early

We all know the power of compounding!

The earlier you start, the less money you’ll have to save each month to reach the same kitty of funds you dream of. Also, it allows you to have ‘a moderate approach’ towards riskier investments.

For example, with a 7% annualized return, one will have to save around $900 per month to reach USD 1 million savings in 30 years. If you have just 20 years, you’ll need to save around $2,000 each month to reach the same goal. The lost duration in your life makes you vulnerable to riskier investments and makes your possibility of reaching your goal uncertain.

2. Have multiple sources of income

Have multiple sources of income and do not carry all your eggs in single basket. Ideally, there should be one primary source of income and other passive sources of income supporting your day to day living.

You can turn your hobbies into a source of income or utilize your existing skills in your spare time to earn more income. Invest your early days in learning different skills which either save your hard-earned money or help earn extra. You can take help of many avenues available to earn income online as well. This will ensure that you reach your dream goal of USD 1 million savings despite of uncertainties in life.

3. Avoid waste of money running behind unnecessary luxuries/addictions

You save a lot saving your spend over unnecessary products/luxuries and balance your lifestyle in such a manner which is sustainable and takes care of all your needs. Obviously, it is pertinent to have a close watch on your needs and ability to maintain the same over the period. So judge your needs, ability to maintain the same while dreaming your USD 1 million savings goal. there can be multiple ways one can save money, for example

you can look for relatively cheap clothing option instead of going mad on branded ones.
get rid of all harmful addiction, it will save spend now as well as your medical expenses in future.
Do not rely on credit cards to spend on your day-to-day needs, this ensures that you spend wisely.
Try home cooking, it save a lot in comparison to buying food outside.
time your purchases when there are big discounts and sales around
use public transportation if possible
staying away from expensive places in the city to save on rent expenses

Inculcating simple habits like unnecessary spending using credit cards, can help you reduce down your total spend over the period and any money saved is rather money earned. You should first prioritize your savings and then spend the rest on your needs and luxuries.

4. Invest wise

What will you do with your savings? One also concentrates on how you invest your funds so that they grow along with increasing inflation first in order to protect the value of your kitty as well as grow it over the period. One needs to earn interest and gains enough to defeat the inflationary pressure and further fetch benefits from compounding.

Make use of multiple sources of investment such as bank fixed deposits, equities, gold, debt securities, real estate and cryptocurrencies to put your funds so that they are safeguarded against the market risks and at the same time, provide your handsome returns.

Do not hesitate to take advice from a personal finance consultant to get customized assistance in achieving your USD 1 million savings goal.

5. Taxes

Saving your funds in tax-advantaged savings schemes can have compounding benefits and help you reach millionaire status more quickly.

For example, retirement funds can grow tax-deferred in dedicated retirement accounts such as your employer’s 401(k). Medical savings receive a triple tax benefit in a health savings account, or HSA. College savings earn tax breaks in a 529 account.

Taxes optimization can help you USD 1 million savings in a legitimate manner while not being overburdened with taxes.

6. Manage your debts:

Your luxury car on debt can cost you a lot more than you thought of. Be conservative while purchasing products/assets on debt especially when they depreciate over the period. Paying interest for depreciating assets increases the overall cost which can be better avoided.

So, if you love your goal of USD 1 million savings enough, be happy with your Toyota till you save enough to buy your Mercedes on your own.

7. Monitor your progress:

It is important that you monitor your progress towards your USD 1 million savings goal periodically. Also, your investment portfolio and level of earnings need a check so that you can work upon it/ change to the extent needed.

Stay tuned for further insightful articles, posts and news in our blog.