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Yahoo
9 hours ago
- Business
- Yahoo
The Wealth Myth: Why You Don't Need a High Salary To Be a Millionaire
Many of us dream of becoming a millionaire, but did you realize that in America, that dream is much closer than most of us think? The U.S. has more millionaires than any other country. According to the UBS 2024 Global Wealth Report, there are 22 million people in the U.S. who are millionaires, accounting for 6.6% of the population and 38% of all millionaires worldwide (per For You: Try This: Contrary to popular beliefs about becoming a millionaire: You don't need to inherit a million or more dollars. You don't need to have found a seven or eight-figure company and sell it. You don't need to earn a six-figure salary. According to a Ramsay Solutions study of 10,000 millionaires, most respondents (79%) did not receive an inheritance and one-third never earned a six-figure salary in any single year throughout their career. It's true, not only is the American Dream alive and well, but it's also closer and more accessible than many people think. Let's look at how you can increase your wealth and net worth with the goal of reaching millionaire status. Naturally, the more you save and the higher rates of interest you earn, the easier it will be to increase your net worth. At 23, if you put $100 per month, less than the cost of a coffee every day and around the same amount you put into subscription services (according to CNET), each month into a Roth IRA, earning a 12% average annual return (as suggested by Ramsey Solutions), that would give you an incredible $1.04 million by the time you're 62. If you continue for another 5 years, that sum will turn into nearly $2 million, which is a hefty retirement fund. Check Out: That's the power of compounding interest and that is by far one of the best ways to save money and become a millionaire, even if you don't earn six-figures or inherit a fortune. As we mentioned above, a 12% average annual return, when compounded over decades, makes a huge difference. Even if you start saving later, if you put a lump sum in, the compound effect from investments will accumulate over time. Whereas, if you expect to make millions from savings and salary increases, you might be disappointed. Wages have increased far more slowly and less than any other way to earn income. According to the Social Security Administration (SSA), Average Wage Index, the average U.S. salary in 2019, before the pandemic, was $50,040. Now it's $63,932 (as of 2023, the last year with verifiable data). According to data, the average increase last year was 3% to 3.9%. In other words, you're going to make more money in the long haul by consistently investing in an IRA and other investment accounts, provided the interest rate is compounding and consistently higher than savings accounts and salary inflation (neither is hard to achieve or find). The big challenge that many of us face is not letting lifestyle creep impact how much we invest and save. Plus, there are always unexpected costs and emergencies, so it's useful to have something set aside that's separate from your wealth-generating investment accounts. The best way to save, whether individually or as a couple — and this goes whether you've got a business, self-employed or are on a salary — is to calculate what you can afford and then have it automatically transferred to the accounts you are investing money in. Make it disappear, quickly. Out of sight, out of mind — do this automatically. That way, the money you just sent to your savings or investment account(s) isn't part of your spending money. It isn't in your checking account. It's already gone. Accepting that it will take time and consistent effort, while also acknowledging that once you've got into a good habit, it becomes easier to stick with it will help you save money every month. Renting is expensive. In big cities, the average cost of renting is a lot more than 30% of the average median salary, making renting unaffordable for many, according to The New York Times. Buying a home is also expensive, but what you'll get is an appreciating asset. An asset that will increase in value and crucially, the equity you have in your home will increase the quicker the mortgage is paid off. You could be living in what could become your retirement fund and that in itself could make you a millionaire. And remember, the equity in your home depends on three things: The value of the property increases over time: U.S. real estate values have almost consistently increased every year since the 1960s. Based on Federal Reserve data, the average U.S. property was worth $196,000 in 2000; 25 years later, that figure is $415,000. Any changes and improvements you make to your home. That will increase its value. The amount you pay off your mortgage. The quicker it's paid off, the sooner you'll own a larger chunk of the equity, until it's paid off in full, thereby giving you the whole value of the property. Even $100 extra paid per month is $1200 in a year and $12,000 in 10 years. Becoming a millionaire isn't out of reach. You don't need a rich inheritance or to build and sell a business or a high-stress six-figure career in a bustling big city. You can earn a regular wage, put money aside, invest in a home and invest in the market, until the magic of compound interest and continued rising property prices combine to build a seven-figure pot of gold at the end of the rainbow. More From GOBankingRates 5 Cities You Need To Consider If You're Retiring in 2025 This article originally appeared on The Wealth Myth: Why You Don't Need a High Salary To Be a Millionaire
Yahoo
20-05-2025
- Business
- Yahoo
Tariffs Aren't Making Groceries Cheaper — Here Are 10 Ways You Can
Tariffs and inflation seem to be increasing prices at the grocery store, despite the claims and promises made by President Trump that Americans will be 'affording their groceries very soon.' With the tariffs the United States is imposing on imports, not only are food costs still rising, but so are the costs of many other goods thanks to supply chain issues and higher rates at the borders of Canada and Mexico. Read Next: For You: Unfortunately, it may not be possible for prices to go down to what they were in Trump's first administration. In fact, it may be up to you, the consumer, to lower the amount you spend on groceries. Curious how to do it? Ramsey Solutions recently gave several suggestions to make your groceries cheaper — and these ten are the best of the bunch. Often, people view dinner as a large, complicated meal. Rachel Cruze of Ramsay Solutions suggested redefining dinner as a far simpler meal. Think soup, grilled cheese or even breakfast for dinner in the form of scrambled eggs and fruit. When you stop spending on gigantic final meals for the day, you can save some money and maybe even start a healthier diet. In this case, it's about not focusing on quantity but rather the high quality of your next meal. Buying in bulk can save you money on groceries, as items in bulk are usually greatly discounted. Remember, when it comes to personal finance, make sure to buy smart and stick to non-perishables for your bulk buys. This trip to the store might be a more expensive credit card swipe in the store, but it will definitely save you money in the long run. Find out when your local store deploys their daily or weekly deals, rather than shopping when it's most convenient, timewise, for you. Whether you prefer Trader Joe's, Costco, Walmart or just your smaller neighborhood mom-and-pop grocer, there will often be times or days when you can find better discounts. You can also experiment with getting out of your routine and try other grocery stores to see where you can save the most. You might discover that your favorite local grocer overprices their produce or doesn't have sales as good as their competitors. Feel free to become a savvy shopper and see how other stores are pricing. When you're hungry, everything looks good — even the expensive stuff. Never shop on an empty stomach, as it will just lead to an empty wallet. Want to discontinue impulse shopping? Order curbside pickup to keep yourself from wandering the aisle and getting tempted. One of the best ways to stick to your budget is to stick to your grocery list, which has only the items on it that you need for your meal planning. Farmers' markets are not usually cheaper than grocery stores — except at the end of the day. Typically, vendors don't want to bring their food items home at the end of the day and will cut prices just before closing. You're likely to score some deep savings just before they wrap up. Consumer Reports has noted that most store brands are equal to name brands in both quality and taste and are still 20-25% cheaper. Just because you discover a deal, that doesn't mean you should spend on it — if something isn't on your grocery list, even if it's a good deal, don't bother. Spending too much on produce? Have a nice backyard? Consider developing your green thumb and making your own garden. Caitlyn Moorhead contributed to the reporting for this article. More From GOBankingRates 5 Luxury Cars That Will Have Massive Price Drops in Spring 2025 I'm a Retired Boomer: 6 Bills I Canceled This Year That Were a Waste of Money These 10 Used Cars Will Last Longer Than an Average New Vehicle Sources Ramsey Solutions, How to Save Money on Groceries Consumer Reports, Store-Brand vs. Name-Brand Taste-Off This article originally appeared on Tariffs Aren't Making Groceries Cheaper — Here Are 10 Ways You Can
