Million Dollars Club: How To Join The Group of Millionaires

By July 18, 2018 No Comments
Want to join the millionaire club?

Did you know that almost one-third of Americans expect to become millionaires during their lifetime?

If you’re one of those individuals interested in joining the Million Dollars Club, it’s time to take a quick crash course on how your millionaire dreams can become a reality.

In this post, you’ll learn a few different ways that a “millionaire” is often measured, how you can calculate your net worth, and what you can do to join the Million Dollar Club even faster!

Requirements for the Million Dollars Club

So what does it take to join the Million Dollars Club?

At first, the question seems a little unnecessary, but you can actually look at the definition of a millionaire from a few different angles:

  • Do you need to have one million dollars of cash in the bank?
  • Do you need to be earning at least $1 million every single year?
  • Do your assets, like a house, count toward your million dollar requirement?

When it comes to measuring your million, there are a few different metrics you can use to count your dollars (or whatever the local currency might be):

  1. Net worth: The total sum of your assets minus your liabilities
  2. Total assets: The total value of all financial assets that you own
  3. Liquid assets: The total value of all your financial assets that are immediately accessible

Depending on which number you choose to use, you can end up with drastically different lifestyles in mind.

When you first hear the word “millionaire,” you might think of large houses, fancy cars, and big boats. It’s the type of generational wealth you often see in the news, history books, or movies.

That might be the millionaire lifestyle for some people, but for every card-carrying millionaire out there, you can find another (or several) who are “The Millionaire Next Door” – those who have carefully built their net worth over time and rarely display it.

For what it’s worth, the most commonly-accepted definition of a millionaire – and the one we’ll be using in this post – is $1 million in total net worth.

How to calculate your net worth

To monitor your progress along the million-dollar journey, it’s important that you understand how your net worth is calculated so you can take a “snapshot” of your wealth from time to time.

You might be afraid to calculate your net worth your net worth for one of two reasons:

  1. You hate math and it sounds complicated
  2. You feel insecure or ashamed about past financial decisions

While it might be intimidating to confront your current financial situation, “making peace with your money” is a necessary step before moving toward your goal of a million dollars (or any financial goal).

How will you ever know if you’re a millionaire if you don’t do the math!?

Here’s the quick, high-level equation for how you can calculate your net worth:

Assets (Liquid + Fixed) – Liabilities = Net worth

Grab a sheet of paper and create a list for each category. Here are some examples that will fall under each part of the equation:

  • Liquid assets: cash, savings and checking accounts, CDs, stocks, bonds, mutual funds
  • Fixed assets: your house, car(s), jewelry, electronics, furniture
  • Liabilities: all outstanding debts (mortgage, auto loan, student loan, credit cards)

Add the assets together and then subtract the liabilities from your total. The remainder is your net worth.

I think it’s useful to calculate your net worth by hand (or spreadsheet) the first time to make sure you understand what goes into the equation or get a rough idea of where you’re starting…

But if the formula becomes too messy, there are financial tools like Mint or Personal Capital that can “magically” perform the nitty-gritty calculations for you!

The Million Dollar Club: How to Join

Looking at the net worth equation, there are two different financial behaviors you need to focus on to become a millionaire:

  1. Increasing your assets
  2. Decreasing your liabilities

Working on either of these two factors will help you reach that million dollar net worth.

By earning more money – and saving more of what you earn – you’ll be able to allocate additional money toward long-term financial success through acquiring assets and paying off your debts.

Here are some helpful tips for you to earn and save more:

Ways to start earning more money

Finding ways to earn more money is critical if you’re trying to work your way into the Million Dollar Club.

To become a millionaire, you’ll actually need to earn multiple millions of dollars as much of what you earn will go toward immediate expenses like groceries, car insurance, or other purchases that don’t build your net worth.

These tips can help you boost your income:

Wake up earlier – or work later. Whether you’re an early bird or a night owl, you can accelerate your millionaire journey by finding additional time to work a second job, build a business, develop new skills, etc. Personally, I’ve found the best results from waking up “early” – right now my definition of early is 6:00 am – so I can set the tone for the entire day and prioritize working on my goals while my body is recharged.

Start a side hustle. If you’ve ever dreamed of being your own business or building your own business, side hustling might be the perfect fit for you. Side hustling has many benefits: you can enjoy a change of pace from your day job, diversify your income in case of financial hardship down the road, or simply develop new skills that complement your résumé in your current career.

Make the most of a raise at work. Next time you get a raise at work, stop and evaluate your financial goals before you catch yourself giving in to “lifestyle creep.” Since you’re already used to making ends meet with your previous income, why not allocate that new income toward paying down your debt or increasing your monthly investment contributions rather than upgrading your car or housing?

Put your money to work for you. Sure, you can reach $1 million by earning one dollar at a time – let’s say $20,000 for the next 50 years. Most members of the million dollars club didn’t get there by saving a dollar at a time. Instead, most millionaires invest their savings so that early income can multiply for them down the road. Get started early and let compounding returns do the work for you.

Ways to start saving more money

Saving more money will be critical throughout your entire millionaire journey, whether you’re trying to build your net worth by:

  • Paying down your debts as quickly as possible
  • Maximizing your down payment on a house
  • Minimizing the interest you pay by making purchases with cash
  • Starting your own business, etc.

If you find that having “extra” money seems to burn holes in your pockets, here are some ways you can work on saving more instead:

Learn how to have fun without spending money. It can be hard to find cheap things to do when you’re bored on the weekends, especially if your friends want you to spend $15 on brunch or $40 on cocktails. While it’s okay to enjoy these things in moderation, you can speed up your journey toward millionaire status by mixing in some free/cheap alternatives like hosting a potluck brunch or game night instead.

Make the most of the resources available to you. If you’re trying to maximize the utility of your money, avoid spending it when you can get similar things or experiences for free. One of my favorite resources for saving money is the library. The library’s benefits extend far beyond simply checking out books. Underutilized perks include free museum or park passes, Lynda.com subscriptions, and a variety of community events and classes!

Keep your financial splurges in check. When it comes to saving money, sticking to your budget is key. That’s not to say you can’t ever treat yourself to a nice dining experience or weekend getaway. (After all, personal finance blogger splurge sometimes, too!) Just make sure your splurging is meaningful to you and doesn’t introduce long-term, recurring expenses moving forward.

Benefits of the Million Dollars Club

So what’s the big fuss about wanting to join the Million Dollar Club, anyway?

You deserve to be warned:

The benefits of becoming a millionaire may not quite be what you imagined.

Sure, everybody wants to look like a million bucks, and everybody wants to spend a million bucks…

But here are some of the real advantages you can enjoy when you have a million dollars or more in net worth:

  • Feel greater peace of mind when faced with financial uncertainty
  • Develop confidence in your ability to make sound financial decisions
  • Know that your money is working for you, not just the other way around
  • Skip interest payments and unwise debt by making purchases with cash
  • Have financial resources available to take advantage of new opportunities
  • Make decisions based on your own goals and financial values rather than necessity

And yes, you can more readily afford to indulge in some of life’s splurges and luxuries with your discretionary income, too.


To close, here’s some good news which might seem intimidating based on your financial situation:

It will likely take a net worth of $1 million or more for you to retire.

That’s right. If you’re making adequate contributions to your retirement accounts, it’s probably just a matter of time (perhaps 30-40 years) until you hit that seven-figure wealth and get your Million Dollar Club award in the mail.

Does becoming a millionaire during your life seem out of reach?

Don’t despair. When it comes to your personal finances, it pays to be patient with yourself. While “quick wins” can help you stay motivated, the Million Dollar Club is open to everyone willing to make a consistent effort over the long run.

Do you want to become a member of the Million Dollars Club? What interests you the most: having a million dollars, looking like a million dollars, or spending a million dollars?

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