I'm catching up on my reading this week. Piggybacking on my last entryWhat it takes to be rich, I just read another article on CNN Money's site called Make your first million in 2007.
The article talks about 5 ways to become a millionaire:
1. Make saving automatic - Sign up for automatic investing plans... That way the money starts compounding immediately. Plus, you'll never miss it.
2. Take advantage of Uncle Sam - Make full use of any tax-sheltered accounts that are available to you, such as a 401(k) or IRA.
3. Make stocks work for you - Stocks give you the best shot at high returns, having returned more than 10% a year since 1926, twice the return of bonds. If you don't consider yourself a stock picker, a broadly diversified index fund - tracking either the S&P 500 or Wilshire 5000 - is a perfectly reasonable option.
4. Boost your earning power - As the numbers show, the fastest way to amass seven figures is to pull down a big salary. If you're young enough, a professional degree such as an M.B.A. or a J.D. will pay off.
5. Don't stop saving - Remember, just because you've stopped doesn't mean inflation will. As the years tick by, a million dollars will become worth less and less - and you'll need more and more to lead the lifestyle you were counting on. So when you hit the seven-figure mark, keep going.
I actually think this is a pretty good article and recommend many of these strategies to my clients.
However, my first thought when I saw this article was that this won't make you a millionaire in 2007 (the title of the article).
But if you put these tips into place early, and persist each year, you will become a millionaire eventually.
And, if you're young, most likely you will need well more than $1M to retire, so the sooner you develop good money habits the better!