How to Become a Millionaire in 5 Years: On an Average Income (It’s Ridiculously Simple With My Free Worksheet)

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Making a million dollars is pretty easy once you know how to. So let’s take it up a notch and I’ll teach you how to become a millionaire in 5 years! 

That’s right! 5 years! If you’re here to learn how to make a million dollars – I’ll be the first to tell you – it’s not that hard. You just need to know the steps. And there are only 3 steps! 3! That’s easier than making a cake!

(Oh, and to make it super-easy, I’ve added a plug-and-play spreadsheet for you to try your own numbers!)

Give me the sheet!

You’ve heard “the rich get richer”, you’ve probably uttered those words yourself. But it’s not exactly like that. 

“People who’ve figured out how to get rich – get richer”

~ Mr. FireEscape on how to become a millionaire in 5 years.

I know, I know. It doesn’t roll off the tongue quite the same. But it’s true. You don’t have to start off super-rich to learn how to become a millionaire or have a massive 6 figure salary or more.

The best part, once you’ve mastered how to make a million dollars, you don’t have to be scared of losing it all because it’s not based on luck.

My three steps are:

  • THE straightforward way on how to become a millionaire
  • A reliable way on how to make a million dollars
  • Incredibly repeatable if you feel like making a million again. 

Why do I want to teach you how to become a millionaire?

Well… being a millionaire makes your life better

How to become a millionaire in 5 years? I mean it’s right there in the name!

Yes, there are diminishing returns to happiness when it comes to how much money you have, but apparently $75K income per year is the magic number according to this CNBC report

OK interesting but it’s still not related, right? Here comes the juice.

Do you know what else will make you happy? Not having to work for your income. Being retired, and having your money work for you. A double whammy of happines!

So what does this have to do with making a million dollars? 

If you’ve read about Bill Bengen’s 4% rule, you’ll know that you should save up 25x your desired annual retirement income for a happy retirement. That’s $1,500,000 in savings for $75,000 of work-free income. 

See. Everyone will be happier once they learn how to become a millionaire.

Heck, I’ll even tell you how to spend your $1M once you get there too!

So invest a few of your time now to learn how to become a millionaire and be a happier person! 

Here’s what we’ll cover:

  1. Education matters
  2. Savings impact
  3. Investing for the win
  4. AND – we’ll look at the EXACT STEPS of a couple who made a million in 5 years. 

But first! 

I made a super awesome FREE plug-and-play worksheet for you to follow along and type in YOUR exact situation. That way you can plan out what YOU need to do to make it millionaire status. (It will popup on your screen after this graphic).

The simple steps on how to become a millionaire in 5 years

Step 1 – The right skills for how to become a millionaire

If all my money went up in flames and I had to start over, I’d still be okay. Why’s that? I’ve always valued my education

It’s true.

  • As a kid I was wowing parents with my knowledge of baking soda and vinegar. (I assumed they didn’t already know.)
  • As a teen, I’d sleep in class just to stay up all night studying. (Go figure.)
  • Now, as a dad, I can’t help but try to teach all sorts of weird stuff to my kids. (Like compound interest, anyone?) 

I have skills and credentials now and that is huge. My bachelor’s degree got me a good tech job and gave me a decent salary. 

Then I took a bunch of extra courses to become a specialist which earned me more money. 

Once I had the money, I took more courses and workshops in investing, real estate, and entrepreneurship. Now, BLAMO! I don’t need a job anymore.

I’m not here to gatekeep how to become a millionaire!

Do you need a “higher degree” to become a millionaire? 

No, you don’t need a special degree. But you do need to know enough to get paid well. How you want to go about that is fine with me. 

Here’s one example that worked for me:

  1. Get a degree to get a job.
  2. Get specialist certification relevant to your field, work as a specialist.
  3. Start going to conferences and take courses to become especially specialized.
    This should be easy, because no one else wants to do that stuff. If you offer to go, your company will send you. If they don’t, your company sucks…quit. 
  4. Upon gaining special skills. Ask for a raise. 

This is the goto path to high-income quickly. Some people will push for side hustles. I’ve tried and they suck IF you already make good money. 

If your job sucks and you’ll never get paid much then by all means side hustle away. I’ve been watching and people who are really into side hustles typically have little base income. 

Here’s another example if you hate the one above:

  1. Learn something better than your job (like flipping houses).
  2. Take entrepreneurship workshops and become impressive.
  3. Keep learning your craft, become the best of the best and market yourself as “premium” for a higher income. Effectively a specialization in premium-ness.

In any case, investing in learning and becoming better at what you do yields more money. Got it? 

What does that actually get you? 

Say your living expenses are $59,000/yr. 

If your salary is $60K, and you’re saving a thousand per year, it will take 1000 years* to become a millionaire. 

Blech. Too long. 

I hate waiting… especially if I have to do it cryogenically. 

Now if your salary is $120K, and you’re saving 61K/yr, it will take you 16 years* to become a millionaire. 

Oh good. You’ll still be alive! 

(* assuming you just save)

Step 2 – How to make a million dollars by cutting costs

Believe it or not, the biggest predictor of your financial success is not necessarily your income. 

It’s how well you save.  

The absolute numbers don’t even really matter. It’s the saving ratio. 

If you’re making $200K and spend $100K/yr, you’re in about the same place as Johny down the street who’s making $60K but somehow lives on $30K/yr. 

I go into it more in the 4% rule article, but the magic number is 25x your annual spending – that’s how much you need to save up to retire. Live on less = need less savings.

Most people save only 5% of their income each year.

Future rich people like you should save 50%+. 

How the heck do you do this?

The best part of being a good saver!

Now here’s the best part. It’s not just about how much money you save. It’s about training yourself to spend less!

Think about how much further that million is going to get you if you enjoy living on less

Think being frugal is boring? It’s not. 

  • I still take awesome vacations (I just travel to cheaper countries and spend like a maniac). 
  • I still go out for burritos with friends (I just do it less often and treat it like a big deal). 
  • I still have cool hobbies (I only plow money into stuff I really like). 

Let’s look at our examples from before. 

  • Brett’s salary is $60 K/yr but he spends $59 K/yr so it will take him 1000 years* to become a millionaire. 
  • Rhett’s salary is $60 K/yr but he spends only $30 K/yr so it will take him 33 years* to get a million dollars. 
  • Now Jett, he took advice from both steps 1 and 2. He spiked his salary to $120K but kept his spending to $30K like Rhett. It took him only 11.1 years* to save a million dollars. 
  • (*again, just saving – not even investing!) 

In the corporate world, they would say that’s “a synergy”. Now he gets to retire early and spend more than he did pre-retirement. 

Be like Jett. 

Step 3 – How to become a millionaire with investing

Honestly, steps 1 and 2 is where I want you to spend the most of your mental energy. 

Step 3 is easy, but only once you have some serious money to invest. 

Investing doesn’t need to be complicated. 

Before we start learning how to become a millionaire, we should set some ground rules. Let’s work with something that needs minimal time and thinking so that you can really focus on what’s important. 

And to do that, invest in index funds. Why, you ask?

  • They take practically zero effort on your part. 
  • It’s the cheapest way to go about investing. 
  • They have shown time and time again to beat anything fancier

There’s really no point in trying to become a fancy investor. I tried to be a hero and break this rule by being a stock picker. Stock picking was not worth it. 

Learn from my mistake and save yourself the time, money, and the blow to your ego. 

Now that’s covered, with the power of investing you can make your money grow itself to millionaire status. 

If you are saving your money in a bank savings account, you are getting 1.5%. 

The stock market though, has a historical 9.5%/yr return. And that’s totally on autopilot! Talk about an easy upgrade! 

What do I mean by “the stock market”? I mean invest in US economy index funds over the long-term. It’s super easy. I have several articles on this:

How to become a millionaire in 5 years
The how to become a millionaire in 5 years process won’t work by putting your paycheck in the bank.

Easy, right?

Seriously, implement my 3-step process and you’ll be a millionaire before you know it! 

Real estate – how to become a millionaire in 5 years!

Yeah, it is easy! So I’m going to toss in one thing that’s a little hard. Otherwise, you won’t feel accomplished when you join the millionaire club and breaking the 5-year mark is hard.

Real estate is the one form of investing that is worth spending a little bit more time on. Why? Through mortgages, you can get some insane financial leverage. Then if you buy a winner of a house you can make an incredible amount of money.

Once you buy that ‘good house’ you can go back to being on auto-pilot (I hire people to do all the work on my houses). So learning about real estate such that you can buy 1 or 2 nice rentals is a great idea! 

Wanna see the how to become a millionaire process in action? Then:

  1. Download my FREE plug-and-play worksheet and 
  2. Let’s look at some real numbers for a real family for you to follow along.

Give me the sheet again!

Meet Millie+Aire – A couple learns how to become a millionaire

Ground rules:

To show how achievable this is I chose the most average American couple I could think of:

  • Have undergrad degrees leading to educated American average jobs 
  • Earn around $60K each (average Bachelor’s degree pay).
  • Already own a home (an average $250,000) with a 20% downpayment (and I’m ignoring any previous appreciation).
  • They are starting with $100,000 investments. (Average 60%er American’s savings
  • They live in our lifetime, which means S&P 500 historical average 9.5%/yr growth but a safer 70/30 stock/bond split to grow at 7%.
  • Employers 401K makes a 50% match for up to 5% top-up (Which is average). 
  • I should also mention that I’m ignoring taxes. They make things too messy for now. 

Year 1

Year’s staring values:
Family income: $120,000
Yearly Spending: Doesn’t matter, you will learn to save.
Amount in Savings: $100,000 + An average home

Step 1 – Increase income

They started the year by spending their own money on some courses to become specialized in their field and then positioned themselves for a 10% raise by the end of the year. 

(Add $12,000 to their income → $132,000 for next year.)

They also upgraded their basement and rented it out for an extra $6,000/yr. 

(bringing their income to $138,000 for next year.) 

Step 2 – Saving

Millie and Arie decided to get aggressive about saving. It’s sad to work hard then blow it on pool noodles or whatever. 

You can save hard by: 

They said “I don’t care”, started being weird and did whatever it took to get their spending down to $40,000/yr

Yes it kind of sucked, but it was temporary. 

Step 3 – Investing

They started the year by putting $5000 into index funds. This was just to get comfortable with investing this year. 

(If you find yourself with some extra money for any reason, toss it in here too.) 

They also contributed 5% of their income to their 401K for 50% employer-matching. ($6,000 becomes $9,000? Thanks boss!) 

Real Estate. 

This year, Millie and Arie decided to buy their first rental property.

They used their savings for a $80,000 down payment which got them a $400,000 house in a nice part of the city. 

Nice houses like that appreciate well (7%) but have little cash flow. (Womp womp.) This process works so well we will just pretend there is no positive cash flow! That’s right, we don’t even need it!

What else?

Their own house also appreciates 7%. 
We’re assuming they spent around $9,000 on taking courses plus upgrading the basement.

Their money – end of year 1:

$85,948 – their net worth on the rental property
* That’s how much their home is worth minus how much principal they still owe.
* (We’re assuming 7% appreciation in value and 3.75% mortgage interest rate with 30-yr mortgage)
$57,374 – net worth on principal residence IGNORING previous appreciation!
* Again, how much their home is worth minus how much principal they still owe
* If they didn’t just buy it, their net worth here is EVEN HIGHER! We don’t even need that!
* (Assuming 7% appreciation in value and 3.5% mortgage interest rate with 30-yr mortgage) 
$9,630 – 401K investment
* The $6,000 they put in, plus the $3,000 employer match, plus the average 7% growth
$5,350 – from index investments
* $5,000 invested with 7% growth.
$86,000 – additional savings this year
* From learning how to live on less. 
And now they are $244,302 rich!!! And that’s just year 1! 

Year 2 

Starting values: 
Family income: $138,000 – with basement rental
Yearly Spending: $40,000
Net worth: $244,302

Step 1 – Income

They kept showing off how special they are at work to get a 3% raise. (Adding $3,960 to their income by the end of the year) 

They also kept renting their basement out for that extra 6K. Maybe they could increase the rent, but you don’t even need it.

Step 2 – Savings 

Millie and Arie didn’t get too cocky just yet. They kept their costs down. Next year they can relax a bit. 

They didn’t start splurging just because the bank account got big.

Step 3 – Investing:

Again, they contributed 5% to their 401K for the 50% employee matching. ($6.6K becomes $9,900!!)  and put anything extra into index funds. 

Real Estate. 

Last year, their place went up in value by 7% and their tenants paid $6K of the principal. Thanks tenants! 

This year, they’ll use all our extra savings to buy another one!!! (Same values as first rental).

(Oh, and we won’t be paying down our personal mortgage just yet. Wait till you’re a millionaire!) 

Their money end of year 2:

$122,079 – their net worth on their first rental property 
* (same assumptions as year one) 
$85,359 – their net worth on the second rental property 
* (same assumptions as the first property) 
$80,109 – net worth on principal residence
$20,897 – 401K investment 
* (That’s this year plus previous years)
$5,725 – from index investments
* They haven’t added anything. It’s just growing at 7%
$98,000 – additional savings this year
* OMG! You go Millie and Arie! 
So by end of year 2, they have $412,169 in net worth. 

Year 3 

Starting values:
Family income: $142,000 – with basement rental
Yearly Spending: $50,000 – woohoo, living large!
Net worth: $411,527

Step 1 – increase your income 

That’s right. They kept being awesome to earn another 3% raise, adding an extra $4K to their income. 

Step 2 – Saving

They have felt the pain of reduced spending, and now they’re ready to add back the things they truly miss. So they took their spending from $40,000 to $50,000 and felt large and in charge! 

Step 3 – Investing 

They kept adding to their 401K for the employer match. 

And now, after 2 years of dabbling in the stock market, Millie and Arie were ready to put their saved $91,000 into index funds, which grows a minimum 7% per year. 

Real Estate

These houses are still appreciating at 7%, and we’re still assuming they yield zero cash flow. (Keep things simple.) But the tenants are still helping pay down the principal though. Thanks! They won’t (and shouldn’t) buy any more houses now because they have plenty of bills due every month they don’t want to be too all-in on real estate.

Their money end of year 3:

$160,539 – their net worth on their first rental property 
* (same assumptions year after year) 
$121,502- their net worth on the second rental property 
$104,295 – net worth on principal residence
$33,271 – 401K investment 
* (That’s this year plus previous years)
$103,711 – from index investments
* This is starting to get big!
$91,960 – additional savings this year
* You really got this saving thing DOWN! 
Millie and Arie are more than halfway to millionaire with $615,278 to their names! 

Year 4

Family income: $146,000 – with basement rental
Yearly Spending: $50,000
Net worth: $608,176

Step 1 – Increase Income 

Another 3% raise, means their work income is over $144K!

Step 2 – Savings

Millie and Arie got a taste of a millionaire lifestyle by adding $10K to their spending, but they won’t be expanding it this year. 

Step 3 – Investing:

They’ll keep on adding to their 401K employer match. Hey. It’s free money.

And they should have another $85K from last year to invest. All of it goes to simple stock indexes.

Real Estate:

Same as last year. Everything’s appreciating at 7%. We’re assuming the cash flow from your tenants is still zero. (And I’m taking it easy on you over here!) 

Their money end of year 4:

$201,483 – their net worth on their first rental property 
* (same assumptions year after year) 
$159,974 – their net worth on the second rental property 
$130,029 – net worth on principal residence
$46,838 – 401K investment 
* (That’s this year plus previous years)
$201,876 – from index investments
* Grow that dough, Millie and Arie! 
$96,039 – additional savings this year
* You can make it! 
We’re so close with $836,238! 

Year 5 – Home Stretch!

Starting values:
Family income: $150,000 – with basement rental
Yearly Spending: $50,000
Net worth: $822,000

Step 1 – Increase income

Keep working for your raises! Another 3% means $148,000 combined salary!

And we still haven’t even charged more for basement rent! 

Step 2 – Savings

Hold on to your $50K lifestyle. It’s only one more year to go until you’re a MILLIONAIRE! 

You can make it! 

Step 3 – Investing:

Again, top up your 401K and invest your $89K savings from last year into index funds. That’s 7% growth!

Real Estate: 

Same as last year: 7% appreciation and we assume zero cash flow to keep things simple. (Like that’s going to happen 5 years in a row!!!) 

Their money end of year 5:

$245,077 – their net worth on their first rental property 
* (same assumptions year after year) 
$200,930 – their net worth on the second rental property 
$157,414 – net worth on principal residence
$61,692 – 401K investment 
* (That’s this year plus previous years)
$311,052 – from index investments
$100,240 – additional savings this year

To a grand total of $1,076,404!!!!! 

Woohoo! Go Millie and Arie! Go team! 

YOU MADE IT!!!!  You are now officially millionaires. 

And I went easy on you. I didn’t even make you: 

  • Ever have cash flow on those rentals
  • Increase your basement rent
  • Get more than one sizable raise
  • Have a side business

Was it easy? Not always.

Was it complicated? Not at all! 

Does it feel good to know how to become a millionaire in 5 years? Oh hell yes! 

FAQ – How to Become a Millionaire in 5 Years

Steps to become a millionaire

1 – Get motivated and paste your goals somewhere visible
2 – Learn a skill to help you earn a raise
3 – Work hard and ask for a 10%+ raise
4 – Cut your expenses aggressively
5 – Pay off high-interest debt
6 – Rent out part of your house
7 – Invest your money in low-fee index funds, max employer matches and 401K
8 – Enter the rental property game. The returns are worth the headache.

How can I become a millionaire if I have no money?

1 – Starting off with no money won’t set you back much if you have a job.
2 – Having money only helps you earn investing income.
3 – The real start to becoming a millionaire is to get a raise.
4 – Then you focus on saving what money you earn.
5 – Only once you make and save a lot, do you start worrying about investing

What jobs can make you a millionaire?

– Your savings rate is better predictor of time to own $1 Million than income.
– To become a millionaire in 5 years you only need an average income ($60,000)
– High paying jobs can help if you also save aggressively. Doctors, engineers, pilots, lawyers
– The job with the strongest path to large wealth ($1M+) is being the owner of a company you start.

TL;DR – How to make a million dollars in 5 years

Let’s review how to become a millionaire:

  1. Invest in your education to increase your income. 
  2. Learn to save like a millionaire – 50+% of your salary.
  3. Learn how to invest. It’s easy. Just go with index funds. (And then add real estate – my secret sauce.) 
  4. Then rinse and repeat for 5 years for that sweet sweet million dollar feeling. 

Give me the sheet again!

Now I want you to try this for yourself! Start with downloading my COMPLETELY FREE worksheet and plug and play to see how to get to millionaire status in just five years. 

How to become a millionaire in 5 years
How to become a millionaire in 5 years

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4 thoughts on “How to Become a Millionaire in 5 Years: On an Average Income (It’s Ridiculously Simple With My Free Worksheet)”

  1. Hi Mr. FYFE, could you explain the math behind the graphic a little bit more?

    The graphic is the same as the math example with Millie+Aire right? I’m trying to follow along but getting a bit confused. Would be great if you could help me fully understand it.

    You say they start with 100K saved.

    They then have an income of 120K in year 1.
    Of this
    – 40K gets spent
    – 5K goes into index fund
    – 6K goes into 401k matched pension fund for total 9K value
    – 10K goes to upgrading the basement, courses etc

    This leaves 59K in further savings, so together with their 100K starting balance they have 159K.
    Of that, they use 80K for a downpayment on a rental. You assume no closing fees, right?
    Remaining: 79K cash.

    However, above you mention 86K additional savings in Year 1. Where’s the missing 7K?

    Then in Year 2, how does their first rental go from 86K net worth to 122K? (36K increase)
    They bought the place for 200K, you assume 7% appreciation per year, so after Year 1 would be 214K and after Year 2 would be 229K (15K increase from Year 1 to Year 2). Additionally, their tenants paid off 6K of the principal in Year 2, so together with the appreciation that’s 21K. Where is the other 15K coming from in net worth increase for this property coming from?

    I also can’t consolidate their savings again in Year 2. They earn 138K, spend 40K (98K left), invest 6.6K in 401K (91.4K left), but you mention they saved an additional 98K.

    Sorry if this sounds nit-picky but I’m trying to follow along to build up a similar scenario for myself but I’m getting a little stuck. Would be great to get some clarification. Thanks a bunch 🙂

    • OK you really made me dig deep for this one but I think I solved it!
      A few things:
      1 – Feel free to email me, if things start getting too deep.
      2 – If you use the companion sheet I think everything will be much easier and you don’t need to build up a similar scenario for yourself. You can use mine 🙂
      3 – The missing money year 1 is the basement rental income (again using the spreadsheet makes life easier), plus it was a 9K basement/course spend.
      4 – Year 2 you couldn’t make it add up but I think it was mostly because it was a $400K home not a $200K home 😛
      5 – I think that covers everything. One thing that maybe would help keep it clear if there is any more confusion (other than the spreadsheet and emailing me) is that the previous year’s savings I consider to be spent on Jan1 the following year. The math is easier mainly 🙂

  2. I hope this is not to much to ask, but can you be more specific, On what types of index funds and real estate investments you did. I really want to get the concept from your point of view and learning what others have done is how I learn. If it is to personal I understand, I would really just like to understand more

    • No problem at all! I recommend people just stick with index investments for the investing portion. They are way less work than stock picking and far more consistent. (My article on it.

      And for real estate deals, this is exactly what I did ((my portfolio). Although as in the article you just read, I recommend getting relatively 2 relatively expensive houses on a loan (as opposed to what I did 1st and buy cheaper houses in cash). The returns are way better that way. Just make sure the monthly expenses are such that your job can handle some painful vacancies (to make the investment safe).


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