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How to be a Millionaire!

  • Willard Lloyd
  • November 22, 2019
Reading Time: 6 minutes

Most people want to be millionaires…how much do you need?…the key is to find investment returns better than the basic average of 6.7%…and more…

There are two kinds of responses to this

One would be people that genuinely want $1,000,000 as it’s life-changing money.

The other would be the people that see it yet do nothing at all. They think they’ll never get it, someone else will so why bother.

Now it’s unlikely you’ll ever get $1,000,000 legitimately for doing nothing. But what if I told you that you could get $1,000,000 without too much effort? Again, there will be two kinds of people that consider this.

Some will be interested in how they could get $1,000,000 without too much effort. Then there will be those who think it’s not possible and it’ll never happen for them, so why bother at all. 

Now if you think you’ll never get close to being a millionaire, then stop reading. This isn’t for you. But if you want to understand how a simple strategy can be put into place long term to open up the possibility to be a millionaire…read on.


How much do you need?

We know that most people will reach retirement age and not have anywhere near enough money in retirement. Instead, they’ll be dependent on the pension and maybe a trickle of savings accumulated over the years.

They will not be able to afford the lifestyle they had whilst working. And many will simply have to try and maintain work beyond retirement age just to get by.

What good is busting your backside for 40-odd years to have little to nothing to show for it at the end?

Our view is that one of the biggest threats to the Aussie economy long term is people’s financial illiteracy and the attitude of living for the here and now — instant gratification.

Of course, you will get automatic super contributions. And that’s fortunate. But that’s still unlikely to be anywhere near enough. Most people just don’t earn enough income to get to the numbers needed.

There are different views on how much you will need in retirement. But the estimates range from around $500,000 for a ‘comfortable’ retirement to $1,000,000+ for a retirement you deserve.

The question is, at 65 in your current situation, will you have a lump sum of $500,000? What about $1,000,000?

For many people, the answer to that is no. But that doesn’t mean you can’t change the game. You can make small moves now, while you still can to make it to millionaire status at retirement. And we believe anyone can achieve.

Here’s the difficulty though.

To get to $500,000 (not counting superannuation), a 30-year-old would have to put away $14,285.71 in cash for the next 35 years to hit that figure. That’s $275 per week, every week, without fail for 35 years.

To get to $1,000,000 a 30-year-old would have to stick away $549.45 a week every week, without fail for 35 years.

For some, that might be achievable. For most, it’s not. Not considering having to pay bills, living expenses, buying food, paying for the kids, and all the other overheads it takes to run a life.

So if the average person can’t save those figures for 35 years, how the heck can anyone even get close to becoming a millionaire?

I argue that anyone that’s earning an income today has a chance, long term, to become a millionaire. But you’ve got to be smart about it and you have to change your mindset.


The MINDSET needs to be, ‘I can become a millionaire so long as I follow my long-term strategy and make my money work for me.’

There’s nothing wrong with being rich. There’s nothing wrong with being a millionaire. There’s nothing wrong with not having to rely on the state for retirement income.

It’s just whether you want to be like everyone else and think it can’t happen to you or do something about it now and have no worries later.


The numbers — how to become a millionaire

According to information from the Credit Suisse Global Investment Returns Yearbook 2018, Aussie equities (stocks and shares) averaged 6.7% real returns over the last 119 years.


Now that might not sound like a huge return. And it’s not. But it’s far better than the 1% that cash does for you right now. And note, the interest you get from cash is only going to get worse as the country heads towards negative interest rates.

Understanding how different asset classes work is important if you want to climb your way to becoming a millionaire. Stocks and shares are long-term, the best asset class for growing your wealth.


Yes, there are risks, prices go up and down, and there’s no guarantee your investment in ‘Company A’ will be worth more than what you paid for it. But with the right diversified selections, there’s the potential to achieve average returns of around that 6.7% every year, long term.


Now let’s say you could get on average the basic 6.7% return for the next 35 years on your investments. Besides, you were regularly adding money to these investments. That’s a critical part of this strategy.

If you started with just $1,000 and added $50 per week getting 6.7% per year, after 35 years you’d have around $350,000. Bugger, that’s not quite $1 million. But it’s a start.


However, we want you to become a millionaire.

If you bumped that weekly contribution amount to $75, then in 35 years at the very Aussie average of 6.7% per annum you’d end up with around $515,000. An extra $165,000 just for slightly higher regular contributions.

But still, that’s only just over halfway to millionaire status.


However, even with this strategy, you’ll still hit the million mark, just at 45 years, not 35.

The key is to find investment returns better than the basic average of 6.7%.

What does it look like if you can achieve a higher average return on your investments? Well, the good news is that with a long-term strategy, you don’t have to get massive, crazy, eye-watering returns at once.


If you have $1,000 to start and pop in $75 a week for the next 35 years, your investments only need to average 9.65% per year to hit $1,000,595.


The thing is, there’s a good chance your earning capacity increases over time so that $75 ongoing contribution becomes easier and easier to manage. In fact, over time you might even increase that regular contribution and get to the million-dollar mark even faster.


Or you might have invested in slightly better performing investments and get more than 9.65% on average. Again, all ways to bring that million-dollar figure even closer.

Of course, there’s the opposite side of this coin too. You might not regularly contribute. You might get the average annual performance of less than 9.65% or even less than 6.7%. These are of course risks in growth asset investment like stocks and shares. And that pushes the million-dollar figure out further.

That’s why it’s important to understand risk, know that regular long-term contributions are critical to the strategy and getting the right advice as to what to invest in, and how, is also important.


But these aren’t crazy numbers. They’re not wildly optimistic investment returns. The key aspect of the strategy is the long-term nature of it. It’s not rocket science, it’s simple, straightforward planning and investment.

You need to start early and keep it regular, with smart, long-term investments. The longer you leave it the harder and harder it gets, until one day…it really is impossible to become a millionaire.

But it doesn’t have to be that way.

Young, smart, forward-thinking individuals can all be millionaires in our view, it just depends on putting the simple, smart strategy into place for the long term.


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