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- We asked experts the best ways to save $1 million.
- Naturally, reaching the $1 million milestone takes patience, hard work, and plenty of sacrifice.
- Visit Business Insider’s homepage for more stories.
There’s a difference between having $1 million and saving $1 million.
These days, many people can say they have $1 million, at least if you’re asking them about the value of their assets. Reaching the million-dollar milestone often involves real estate inflation, stock market performance, or other factors that don’t necessarily translate to tangible wealth.
On the other hand, it’s a smaller group of people who can say they’ve who have actually saved $1 million. That takes patience, hard work, and sacrifice.
We asked experts their best advice for saving $1 million — here’s what they had to say.
Start early
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Mark Bell-Berry, a mortgage advisor with Chalfont Investment Consultants, said starting early is key to saving $1 million.
"Even when you are just saving for a mortgage deposit, be prepared to make those early sacrifices," he told Business Insider. "Curtail excessive lifestyle choices. Learn to live frugally, as much as you can bear. This will bear fruits later on, both in terms of reduced repayments and fewer years doing it."
The attraction of paying off your mortgage as soon as possible is obvious, but Bell-Berry pointed out the advantages of keeping it going while investing in other long-term schemes.
"The repayment will eventually finish," he said. "So assuming your rate of repayment is manageable, using available funds elsewhere will spread your chances of a heightened return, in addition to owning your property."
Follow the 10-10-10-70 rule
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While self-made millionaires are often assumed to be self-starters, it is possible to get rich on someone else’s clock.
Jeff Lestz is now the CEO of his own company Genistar, but he made his first $1 milion when he was 31, six years after he started working for a large financial services firm.
He said to save up that much money, he followed what he called the 10-10-10-70 rule of spending.
For every paycheck he earned during those years, he gave 10% to charity, saved 10% in a short-term easy-access fund, invested 10% in a long-term plan that was locked in until he was 60, and learned to live on the remaining 70%, including all mortgage payments, taxes and insurance.
"It’s not what you make — it’s what you keep," he told Business Insider.
Maintain good habits
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In addition, every time Lestz got a pay raise, he maintained exactly the same level of expenditure as he did before, and put away the difference.
"It’s human nature to increase your outgoings as soon as your income goes up," he told Business Insider. "But it’s actually much easier than you realize not to, because you don’t have to make any changes or sacrifices to your lifestyle. It’s simply a question of habit."
See the rest of the story at Business Insider
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Source: Business Insider – feedback@businessinsider.com (Caroline Frost)