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5 Ways to Work Toward Millionaire Status

5 Ways to Work Toward Millionaire Status

Becoming a millionaire is largely about finding more money to save and invest. Before we started the process of educating ourselves in the ways of money management, we really thought that becoming a millionaire was impossible for working class people like us. We’d been raised believing that there are the “haves” and the “have nots” and that it wasn’t our choice which group we were in; it was simply luck of the draw.

Today, over three years since we’ve really been committed to continuing personal finance education, we now know differently. Honestly, although I love hearing the many stories of people in their thirties, forties and fifties who have become millionaires through diligent saving and serious expense-cutting, many of those people and families have six-figure incomes.

But what about the rest of us? Those making well below six figures and raising kids? Don’t give up; there’s a chance for you too. Consider the story of janitor Ronald Read. When Read died at age 92, he left behind a massive, $8 million dollar portfolio. Widowed and the stepfather of two, Read left most of his fortune to a local hospital and library in his home state of Vermont.

So, how did somebody like Ronald Read, a low-income earner working as a janitor and maintenance worker at a local store (after he spent some time pumping gas) amass such a fortune? Β Here’s how Read did it, and how you can work your way toward millionaire status, no matter what your income.

So You Want to Be a Millionaire

Every Penny Counts

Millionaire status doesn’t necessarily require that you live in a van down by the river, but it does require that you watch your pennies. How to find a balance between living well and living frugally? Consider these tips.

Be a Value-Based Spender

Value-based spenders refuse to spend money on things that don’t hold much value to them. They avoid the fancy coffee shop and bring coffee from home. They eat out only on special occasions. They precede spending decisions with the question “Does this purchase really bring value to my life?” If the answer is no, they don’t allow the “Oh well, it’s only ($5, $10, $20, $50) bucks, what the he**?” mindset to sway their decision.

Instead, they refuse the purchase and look for opportunities to use that money in a way that will bring value to their lives.

Recommended Reading: The Legend of the Monk and the Merchant: Twelve Keys to Successful Living

What a value-based purchase is varies from person to person. Only you can decide what a value-based purchase is or isn’t in your own life, and a good way to help start educating yourself on that process is to make a list of the top five things you want from your life money-wise. It’s important to think long-term and big-picture as you make your list. For instance, our list would include these two money goals

  • We want to be debt free so that we’re not in bondage to loan, mortgage and credit card companies
  • We want to have X amount in savings so that a financial problem such as a job layoff will be a hiccup instead of a throw-up πŸ™‚

After you’ve made your list, you use those reasons and measure them up against purchases. You ask yourself questions such as:

  • Will this purchase pull me toward or pull me away from my goal of being debt free?
  • Is this purchase a necessity to my life?
  • If this purchase pulls me away from my goal, is it worth the extra time it will take me to recover that money?

I’m willing to bet that nine times out of ten, when thinking about purchases from a value-based standpoint, most times you’ll end up foregoing that purchase in lieu of greater things.

Learn to Differentiate Between a Need and a Want

In today’s materialistic society, most people have lost track of the difference between a need and a want. Let me give you an example.

Recommended Reading: Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Ind ependence: Revised and Updated for the 21st Century

When I worked in the banking industry, I worked for awhile as a personal loan rep. We’d take incoming calls for applications for car loans, personal loans and home equity loans. One day a guy called asking for several thousand dollars (unsecured) for new furniture. After pulling his credit report, we learned that the guy was in hock up to his ears and had little savings to speak of.

The underwriter and I both agreed that this guy was not a good risk. When I got back on the line to tell him the loan was denied, he flipped out big time.

“What am I supposed to do now? I just bought this new house and I need new furniture!!!”

I gently tried to explain to him that maybe there was another way, like living with the furniture he had or getting a second job to save up the money, but he would have none of it.

I’m not judging the guy; we’ve been there too. But now that we’re off of that train, I can tell you that life is much better when you’re not working to live up to the Joneses and their long list of “needs”.

Recommended Reading: Β Β The Millionaire Next Door: The Surprising Secrets of America’s Wealthy

Work to learn to think really seriously about what you want – and about what you need in comparison – and I’d be willing to bet you’d find some serious extra cash in your life.

Learn to Get Creative When it Comes to Not Spending

Multi-millionaire Ronald Read was creative when it came to not spending. People who knew him shared about how he used safety pins to hold his coat together when a button broke or how he parked his modest car far away from his destination in order to avoid meter fees. Here are some ideas for getting creative when learning to spend less.

  • Dump cable or satellite and get Netflix
  • Learn to DIY when it comes to home repair or car repair
  • Buy your clothes on sale or clearance, or simply be happy with what you have
  • Learn to cook at home and find ways to save money on groceries
  • Buy a quality used car instead of a new car
  • Avoid expensive vacations and opt for staycations or weekends away
  • Avoid upgrading your techy toys and be happy with what you’ve got

There are many other ways to get creative and spend less if you’ll simply look around for them.

Understand Opportunity Cost

Opportunity cost is the real cost of an item you purchase. Here’s an example of opportunity cost:

A person purchases a new car that has a $482 payment for six years, bringing their total cost for the car, plus interest and down payment of 15 percent to a grand total of just under $40,000.

Let’s suppose that, instead of purchasing a new car, the person drove a reliable, paid for older car and invested that down payment of $4,971 and that monthly payment of $482 a month for six years, earning an average interest rate of 8%. Β 

How much money would the investment be worth at the end of six years? $50,319.37Β 

The new car purchaser gave up the opportunity to gain $50,000 and instead chose to spend $40,000. So, in essence, that new car cost the borrower over $90,000. Β 

Opportunity cost can also be identified by estimating how many hours you would need to work to pay for an item. Let’s say you made $25 an hour after taxes and deductions. Now let’s say that you’re considering a dinner out that costs $75.

Is your dinner out worth you having to work three extra hours? Thinking about your expenditures in this fashion helps put your money in perspective. Most people would agree that their time is much more valuable than their money.

Commit to Action

Self-made millionaires like Ronald Read achieve millionaire status because they persevere in their goal, committing to every day action to help them achieve that goal. Here are some action steps that, if you commit to taking for the long-term, will help propel you toward millionaire status.

  • Commit to living within a monthly budget
  • Commit to tracking spending each month so that you can see where financial leaks are
  • Commit to living a life without debt
  • Commit to saving something out of every paycheck, every month
  • Commit to educating yourself on the different types of investments (stock market, real estate, bank CDs) so you can determine which methods of investing are right for you.
  • Commit to getting back on track if you fall off the money management wagon
  • Commit to working toward your goals no matter what the neighbors or anyone else thinks

Becoming a self made millionaire won’t happen overnight, but every step you take toward a more secure financial future will add up to great results, and would you really be unhappy if you were only able to achieve becoming debt free and having $250,000 in the bank?

Now you’ve got your action list. What’s stopping you from working toward becoming a millionaire? What other steps would you suggest taking to help increase wealth?Β 



  1. I’ve never heard of Ronald Read’s story. Amazing! I used to think being a millionaire meant making a million dollar salary. I don’t think that way any longer. It can be achieved with a little work and planning.

    • Laurie says:

      Isn’t it a cool story? Read’s story leaves the rest of us with no excuses, doesn’t it. πŸ™‚ “I used to think being a millionaire meant making a million dollar salary.” I hear you, Brian. I was right there along with you. So glad we know different know.

  2. So many good tips here. Opportunity costs is the concept that really helped us turn the corner. The dollar you spend is going to always have some sort of opportunity cost: minimize those, and you start to optimize your limited dollars.

    As you said, not everyone’s got a crazy high income. Still, being wealthy isn’t out of most of our grasps, even those earning pretty average wages. It just takes a change in mindset & behavior, and some discipline.

  3. All of these points are necessary if you want to decrease debt and increase wealth! I particularly love “Commit to Action” since nothing will ever change unless you take the action to make it happen!

    I’m also a huge fan of Your Money or Your Life. Reading that book was a wake up call for me. I went through the steps in the book and it forced me to evaluate how our spending aligned with our values. It’s an ongoing process, but very helpful for keeping life values and goals as priority.

  4. Dianne says:

    This article makes great sense! Guess this means I won’t buy that cute lunch bag for $35 and I will continue to sack lunch it.

    But seriously, I have used the method “How many hours will I have to work to pay for this?” since I had my first job as a teenager. It has deterred me from a lot of impulse spending!

    • Laurie says:

      Good for you, Dianne. πŸ™‚ I think it’s amazing that you were using that method so young. That didn’t occur to me until about age 45. πŸ™‚

  5. Value-based spending has really made a difference in my life. Because not everything is created equal and there are some thing I want more. Before I just used to buy and often times I didn’t have the money for things I really wanted because I spent it on stupid things. Thankfully, I’m much, much better at this today, although I still have to watch myself, especially when I’m stressed. It’s easy to fall back into old habits of buying things to alleviate stress.

    • Laurie says:

      Yes!!! It makes such a difference when one is willing to think a bit about the true value of an item before they purchase. Value-based spending has helped me a lot too. Thanks, Tanya!

  6. Really great comprehensive list Laurie! I love value-based spending. It’s tough to always be in that mindset, but if you can train your brain to always think like that, you will get to that millions THAT much faster!

    • Laurie says:

      Yes, and you can indeed train yourself to start thinking that way automatically. It’s a wonderful thing to get to that point; takes so much less work.

  7. Crazy story about Read, I hadn’t heard that before. Sounds like he was definitely aware and tuned into personal finance to some degree, made no excuses and had a plan which we should all aspire to do. Thanks for the post!

    • Laurie says:

      Amen to that!! We are SO over new car purchases now that I understand opportunity cost. Our last vehicle purchase was a ten year old Suburban. We paid $8k in cash for it, it runs like a dream, and someone else took the depreciation on it. Woohoo!!

  8. Excellent tips. Also a big fan of The Millionaire Next Door and Your Money of Your Life. Crazy story about the guy “needing” new furniture as he bought a new house…while in deep debt. I’ve seen that situation many times. If they really thought about it, what they’re wanting to buy is NOT a need. I also like “Commit to Action.” I know some who are in debt who just seem to give up and think that getting out of it is impossible or they’re living in denial…while racking up more debt.

    • Laurie says:

      It’s so easy to give up, but we’ve found that simply persevering does make things better, no matter how bad they might seem financially. Thanks, Andrew!

  9. Love this post – especially the “commit to action” part. So many people spend a ton of time getting educated but then never act on what they learn. That last step mentioned is key to success – financial and otherwise!

  10. Apathy Ends says:

    All good stuff, but I am a huge fan of number 5 – Commit to ACTION! If you can make these changes and stick to them over the long haul there is not anything standing in your way – great post.

  11. These are all great tips! I am still very much so stuck on the “increase income” approach. It’s great to make $50k and save $10k a year, but what if you made $100k and saved $60k a year? Imagine how much quicker you’d reach that millionaire status.

    My opinions and approach my change when I have kids and less time to focus on side hustles and my career : )

    • Laurie says:

      Kids change everything. πŸ™‚ But you’ve got a great point. Even an extra 10k a year can add up really quickly with compounding interest.

  12. I love it. It’s not about how much you make but how much you keep (and Reed definitely embodies that!). Life is a marathon and there’s so much opportunities to save and become a millionaire. The misconception is that millionaires spend a lot of money on things but they most certainly do not!

  13. Iforonwy says:

    Oh do continue to tell folk about YMOYL it is a wonderful book and concept. I often re-read it to remind myself.

    There is great debate this side of the pond that young adults will never be able to afford to buy their own homes as house prices rise and they need to put down large deposits. But they can start to prepare for the purchase. Do they “need” that new all singing all dancing phone, and the cable TV and the nights out on the town? I know that it is not easy but a little application and deciding what is really important goes a long, long way towards a goal.

    • Laurie says:

      “But they can start to prepare for the purchase”. So true!! I hear you on the phones and other gadgets too – it’s ridiculous!! Everyone wants the best of everything, right now. It’s never worked that way in the past but people think they deserve it now, which is why they can’t afford anything without debt.

  14. Kelly says:

    Great Laurie! Budgeting is really important in debt-free life. For me, it’s a blueprint and I can’t live for the rest of the month without it. Budget is what makes it possible to save more and to determine between needs and wants.

  15. Kathy says:

    I was raised quite poor and my mother always said “we beggars can’t be choosers” meaning we had to take any crappy old thing that was cheap. On the other hand, my parents paid cash for everything except their house and cars, and we never ever went hungry, but there was never money for anything extra. Now as an adult, I am at a stage where I can afford anything I want, but I don’t need so much. Even with designated “blow” money, I find no purchase satisfies me as much as watching the bank balance grow.

    • Laurie says:

      “Even with designated ‘blow’ money, I find no purchase satisfies me as much as watching the bank balance grow.” Well said, Kathy. I think I’m going to use that quote in this week’s post. πŸ™‚

  16. Fehmeen says:

    The difference between a need and a want is something a lot of people get mixed up these days and honestly, with all the consumerism bursting through our veins, it’s easy to blur the lines. The basic rule of thumb that works for me is to determine if I can actually live without it or not…and then running a picture of less fortunate people around the world through my mind…and then the answer is crystal clear!

    • Laurie says:

      I love that you work to define whether or not you can live without a purchase. That’s the opposite of today’s world, which often touts an “I deserve to have it” mindset. Great work, Fehmeen!

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