Summary: Financial guru outlines 6 steps to become a millionaire by 40 through investing and budgeting.

From Yahoo Finance: 2025-04-26 17:01:00

Becoming a millionaire by 40 is possible by cutting expenses and investing enough income based on your current age. Financial guru Ramit Sethi outlines six steps to reach this goal, emphasizing the importance of starting early and making aggressive contributions. Regularly investing income is key to maximizing compound interest.

Understanding your definition of $1 million and setting clear goals are crucial steps. By starting early and making consistent contributions, you can achieve the millionaire milestone by age 40. Negotiating a higher salary and investing raises can significantly accelerate wealth-building.

Large expenses like housing and vehicles can hinder investment opportunities. Sethi recommends limiting housing costs to 28% of pre-tax pay and avoiding excessive vehicle expenses. Renting may be a more cost-effective option than homeownership in some cities. Making informed financial choices is essential for long-term wealth growth.

To become a young millionaire, consider the impact of homeownership on your financial goals. Renting may be a more affordable option in many cases. Evaluate all costs and prioritize investments to reach your target. Understanding the reasons behind your goal is crucial to staying motivated and defining what a rich life means to you.

Read more: 6 Steps To Become a Millionaire by 40