Becoming a millionaire is super easy and everyone needs to start becoming one now. Or that is how we should think about it. It should be so easy that, I’ve given you not one but three simple steps to become a multimillionaire by the time you retire. I’m just that nice. 🙂
You’ll actually need a millions of dollars in a retirement account or property in order to throw off the income to live. The best way to do this is to spread your efforts through real estate, stocks, and a company. You want to make sure that you have three investment classes that are up to a million dollars, just in case one goes bad. It will also make you super rich if the market is strong in 30 years. You want a dividend stock portfolio, real estate, and a profitable business to make this all happen. This is how you do it.
- Stock Portfolio: According to the Credit Suisse Global Investment Yearbook, the stock market has made a 8.5% annualized return over the last 112 years. If you can save $800 a month for 30 years, at a 8.5% return, you’ll have $1.3M in your RRSP or TFSA when you are ready to retire. Dividend stocks seem to be stocks of choice of many of our experts, and if you look over time, dividend stocks hold up when markets are correcting, like in 2000, 2008, and even now. They will also throw off income in retirement, so you don’t have to eat as much of the principle, and hopefully the money will last longer. If you invest in your RRSP, you’ll get a tax return each year on the money that you push into your account, but will have to pay the taxes later. You can use that income tax return to dump back into your retirement or pay off debt. If you push the money into your RRSP you won’t get an income tax return each year, but will not have to pay taxes in the future. Thirty years and presto, you’re a millionaire, as long as the stock market keeps going up over time.
- Real Estate Empire: Buy a property as soon as you can, and then when you have paid down enough money to re-mortgage and buy another one, buy another one. If you do this every five years, you’ll have six properties in 30 years. Assuming you can get $2,000 a month from each of them, you’ll be making $10k a month before you pay taxes and expenses. Assuming properties will double in 30 years, like they have in the past, and most of your properties are almost paid off, you should have WAY over $1M in real estate. You can re-mortgage the rental properties in order to pay off your own mortgage and live mortgage free. Even with Real Estate crashes, interest rate volatility, and not 100% tenant ocupancy, you’ll be set in 30 years.
- Start a Business of Love. Everyone should have a part time business. Pick something that you love and start doing it on the side. It can be a floral shop, photography business, fashion blog, or anything that you have passion for. If you can gather another $2k a month from it and save that money in a simple investment that returns 3% or more, you will have $1.1M in 30 years. You might even make more money when you sell the business one day. Plus, you’ll have business expense write offs to help lower your taxes every year. This will be your third million dollar asset in 30 years. Isn’t that awesome?!
Becoming a multi millionaire isn’t as hard as we all think. We just need to set our goal, put in the work and discipline, and then love your millions. The best way to ensure that we make all our millions is by not putting all our eggs in one basket. Have three action plans that will secure your future if one blows up.
Take these three action plans and be a multimillionaire in three different ways. Three is better than one. 🙂