In your twenties? Here’s how to become a millionaire before you hit 40

A young man sits at his desk and reviews his investment accounts.

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Becoming a millionaire before 40 is not as impossible as it seems.

Key points

  • Becoming a millionaire earlier in life isn’t easy, but it’s within reach in your twenties.
  • You would need to aggressively cut costs and look for high income jobs so you could invest a lot each month.
  • Even if you can’t become a millionaire, every dollar you invest in your 20s could be worth much more in your 50s and 60s.

We recently interviewed Steve Adcock, a self-made millionaire who achieved financial independence in his mid-30s. He was able to retire from his job in information technology at age 35 and now spends his time following his passions. One of the most striking things about his journey is that with great effort, a number of Americans could do the same. Especially those who are still in their twenties.

The idea of ​​becoming a millionaire might seem implausible if you’re currently living paycheck to paycheck and wondering how to keep up with the rising cost of living. It is certainly an ambitious goal, and not a path that everyone will want to follow. We all have different incomes, attitudes towards money and financial priorities. Nevertheless, it might be possible. Here’s how.

1. Invest aggressively

Investing is putting your money to work. The idea is to build a portfolio of assets that will increase in value over time. These can include things like stock market holdings, real estate, or bonds. Investing is different from leaving money in a savings account, where it might be safer but won’t generate the same returns.

Keep in mind that there are no guarantees and there may be years when your investments perform poorly. But if you invest with a long-term perspective, you can wait for short-term dips and profit when the markets are good. Historically, stock market investments have delivered decent average returns over time.

Investing aggressively does not mean looking for risky assets either. You can do this with relatively safe investments such as index funds that give you exposure to a range of stocks. Where you will have to be aggressive is the amount you invest: if you want to become a millionaire before you reach 40, you will have to invest a lot of money in your brokerage account.

2. Let compound interest do the heavy lifting

Compound interest is a powerful tool, and all it really needs is time. Historically, the S&P has provided average annual returns of 10%, so let’s see what happens if you put $500 a month in an investment account and it generates an average return of 8%.

Invest $500 per month

Total invested

Portfolio value

In 5 years



In 10 years



In 20 years



In 30 years



In 40 years



Data source: Author’s calculations based on an average annual interest rate of 8%.

The table above shows how effective compound interest can be. Over 40 years, $240,000 in total investments could be worth $1.5 million. These calculations show that it would take about 35 years to become a millionaire with a monthly investment of $500. If you want to become a millionaire before you turn 40, you will need to invest around $1,800 per month. Let’s see how you could find that money.

3. Live within your means

The bigger the gap between what you earn and what you spend, the more money you can save for the future. Live frugally and keep costs as low as possible. That doesn’t mean never having fun, but it can mean letting go of the idea that you have to spend money to have fun. Use a budgeting app to analyze your spending and find areas where you can cut.

One trick I use to keep myself from spending on unnecessary things is to look at what that money would be worth if I invested it instead. For example, I’m looking at some amazing noise canceling headphones that cost $50 online. If I invest that money instead, it could be worth over $500 in 30 years (assuming the same 8% rate). Would I rather have new headphones today or more financial security in the future?

Avoid high-interest debt, such as a credit card balance. Not only are the payments eating into your monthly budget, but the interest you’re paying on your debt is money you’re giving to the bank instead of investing for your future.

4. Focus on your income

There’s not much you can do to lower your costs, but there are several ways to earn more. Of course, not all of us can land high-paying jobs. But you can set ambitious salary goals and ask for raises if you think you deserve them. Work hard and look for ways to contribute to your company’s bottom line.

If your company isn’t paying you as much as you want, consider looking for a new position. You don’t want to hurt your career by changing jobs too often. However, if you focus on earning as much as possible, a new job can lead to a big increase in salary.

Another way to increase the amount you invest is to maximize 401(k) contributions, especially if your employer will match your contributions. It’s basically free money. Looking for other tax-efficient investment accounts can mean you pay less tax on the money you invest, now or in the future.

It may take you longer – and that’s okay

Becoming a millionaire before you turn 40 is an ambitious goal that involves investing a lot of money each month. Adcock and his wife saved 70% of their income. The biggest advantage is that you could eventually become a millionaire if you consistently invest a percentage of your earnings.

It’s not a competition and a million is just a number. What’s important is that you think about what financial independence could mean to you and how you could build a strong financial foundation. If you’re already debt-free, living within your means, and making regular contributions to your investment accounts, that’s a good start. If not, maybe you can set some goals and start achieving them in 2023.

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