20-Something and Still Not a Millionaire? Here’s what We Could Do
I am in my 20’s, and I am not a millionaire. Far from it. I have a job that I love and bills to pay, with enough left over to have a social life and indulge in some luxuries. At some point, my student loans will be paid off – big automatic pay raise! Often, though, I do daydream about what it would be like to be a millionaire. I imagine lots of travel, a vacation home, and doing some real good for others. Then I think about how I could make a million. There are some options, some of them maybe not too far-fetched. See what you think.
This is not an exciting path and it will take a tremendous amount of discipline. But here are the facts (some of them are pretty depressing):
1. The Stock Market
• Despite the volatility in the stock market, it has gone up an average of 8% a year over the past 3 decades.
• If we start with no savings at all, and we are 25, we will need to invest about $5,000 a month. I don’t know about you, but I have to eat, pay rent, and make those ugly monthly student loan payments. Also, every month it seems like there is some big expense or a crisis. This month it was my car, to the tune of $1200.00.
2. Real Estate
• The housing market crashed in 2008 and is still not back.
• Millennials are not buying houses the way they used to – they prefer mobility so they rent
• We can accommodate our millennial peers by buying a house, fixing it up a bit and renting it out.
• If we can then save all of that rent money for a year or so, it can be used as a down payment on the next house. Doing this regularly can increase the number of houses owned, and the rental income increases.
• Here’s my dream scenario: If I could just double the number of houses I buy each year, and I start right now, I could actually own 212 houses by the age of 40. And if each house is worth, let’s say an average of $100,000, I could have $21,000,000 in assets. Hello, beach retirement at 40.
3. Start a Business
The millennial generation is the most out-of-the-box thinking generation ever, and I am proud to be a part of it. Here are the “rules” for and examples of a successful business that could net a million in 15 years or less
• The business idea must be unique – a product or service that others are not offering, or at least an improvement on them. So far, I haven’t come up with one, but I am holding out hope.
• Here are a few non-tech products that netted well over a million for their inventors – post-it notes, crazy straw, slinky, silly bandz, pet rocks, car antenna balls, and the koosh ball.
• Even if you are not a techie (and I certainly am not), but have a great idea for an app, hook up with someone who is. These are so cheap to produce and it’s hard to ever know what will catch on. “Flappy Birds” made its Vietnamese creator several million before he took it down – he was worried about addiction.
• Some entrepreneurs find a cause that is really dear to the hearts of many and develop a product to sell that will also support that cause in some way. Our peers love causes. Here is a great example. Jennifer Eckstrom interned at the “Make a Wish” Foundation and decided she wanted to do something for little girls who had lost all of their hair. She decided to make frilly, feminine headbands, sell them at a profit, and use some of that profit to support these children. For every headband sold, she donates one to a child with cancer, along with $1 to children’s cancer research. A simple idea, marketed really well and pulling at the heartstrings of everyone, has netted her a million in just a few short years.
• As I go through my daily life, I am keeping my eyes and ears open – you just never know when an idea will strike.
4. Refine Your Priorities
Recently, I had a good long conversation with myself and asked these questions:
• Why do I want to be a millionaire?
• Is being a millionaire the most important thing to me right now?
• Will it be the most important thing to me in a few years?
My answers were not definitive, and I can’t say that being a millionaire is for sure my top priority. It is something I would love to be, however, because there is a ton that can be done for others when money is not an issue. Some of us, including me, verbalize this goal, but we tend to put it “on hold” while we deal with life.
5. Getting Perspective
I have no way of knowing how I will feel about money through the next several years. My perspective and priorities could change a lot. If they do, I’ll just embrace them as my new goals. Still, it sure would be nice right now to have those student loans paid off.