How to Make One Million Dollars

12 strategies to make your first million bucks and how to invest it

one million dollars
Photo by Mufid Majnun on Unsplash

It takes a long time to become an overnight success. If you follow these steps you’ll wake up one day and be a millionaire. Looking forward, the idea of making a million dollars seems huge. Almost unattainable. It’s not hard to make a million dollars. It is challenging? Yes. Does it take time and patience? You bet. But the things you need to do are not complicated. Making one million doesn’t require any special skills or abilities. Any high achiever who found this website is capable of doing it. Most can do it in a few years. Less than a decade for sure. Most people who try to make a million bucks quit along the way. The continual grind will discourage you so much, you’ll want to quit. But you can’t. You must find your grit and keep moving forward. 

If you’re reading this, you’re not most people. Looking back one day in the future, you’ll realize how simple this all is. It took a lot of time and effort but it wasn’t all that hard. And you’ll share your story with someone else. 

#1 – Invest in yourself

You are the present value of all your future earnings. To make a million dollars you need to be worth a million dollars. Your labor needs to be valuable. The more valuable your labor, the more you’ll make. The more you make the easier and faster you’ll get to one million dollars. 

A college education is worth a million dollars more than getting a high school diploma.. $900,000 more on average according to this government research.

College is expensive these days. No getting around that. I have a $250,000 piece of paper with my name on it from the University of Richmond. It’s still worth it. Your time in college allows you to discover your learning skill. Learning is a skill and unique to you. There is a method and approach unique to you that helps you learn better and faster. Once you find that, you need to practice. The more you practice, the better you get. The better you get, the more you learn. Learning is a skill. Pay attention to the method more than coursework in college. It will help you every year of your life after college. Learn how to learn. It makes getting one million dollars way easier. 

Never stop learning. Too many people spend the first 12 to 20 years of their lives in school. Then they graduate and stop learning. They stop reading. They stop taking classes. They stop being curious. It’s tragic. Perpetual learners make more money. Millionaires and billionaires read books. Lots of them. This study shows 88% of millionaires read 30 minutes each day. Never stop learning! Never stop investing in yourself. Model your actions from the people who have millions of dollars to their name. 

#2 – Start Investing Early

The best time to plant a tree is 20 years ago. The early you make investing a habit, the better. When I was 15 I read A Random Walk Down Wall Street. I saw this simple math and it changed my life. Invest $5000 per year in the stock market. In 30 to 40 years. I’ll be a millionaire. That’s a long time, but it’s not hard to too. 

Build the habit of investing is more valuable than the dollars in the beginning. As your income grows and you shovel more money into investing, it picks up steam. Warren Buffet calls it the snowball effect. One day you make a million dollars in a year just from your investments. Imagine that. Making a million dollars from doing nothing. Sounds pretty great. 

401ks with matching contributions

If you get a job with a 401k plan that offers a matching contribution does two things. One, make sure the 401k plan offers low-cost index funds that track the S&P 500 or the total US stock market. Two, contribute at least an amount that maximizes your employer match. It’s the only 100% return on investment available to the average investor. 

If you’re able to max out your 401k and get an employer match, you can stash away a lot of money. A $19,500 maximum personal contribution + $5500 employer contribution is $25,000 per year invested. At a 7% rate of return, it takes about 20 years starting from zero to become a 401k millionaire. 

Invest in stocks

Investing in the stock market is easy and free thanks to technology and competition. Commission rates dropped to zero across all major platforms. Automated investing, is the new normal. Index funds fees are so low and often free. The vanguard S&p 500 ETF has a cost ratio of .03%! That’s $3 dollars per year per $10,000 invested. It’s amazing. 

Don’t be one of the 47% of American’s who don’t invest in the stock market. The stock market is an incredible wealth builder. Start investing today, your future self will thank you. 

#3 – Hustle for extra cash and invest all of it

I started doing this in high school. I collected bottles and cans and took them to the recycling center for $.05 a pop. I took the cash directly to the bank and deposited it. I transferred the money directly to my investing account and bought shares of the S&P 500. I did that every summer. That money is now worth about 5x the original investments. 

In college, I sold old textbooks on eBay. My textbooks and books my friends and dorm mates were too lazy to sell. That money went directly into the stock market during the great recession of 2009. Those investments are up over 6x. 

#4 – Earn a relatively high income

This is the least fun, most obvious, and most important piece of the million-dollar puzzle. For high achievers, this is where the majority of your energy needs to go. Your ability to earn big dollars and get equity in your companies is the shortcut. 

Know the high-paid skills, positions, and companies that pay. Get clear on where you can earn high salaries, bonuses, and equity compensation. You do not need to be a doctor to make a lot of money in America.

This data from the BLS, Highest Paying Occupations, looks like garbage data to me. 

I know product managers, developers, and data scientists that crush these stats. Ad tech, marketing tech, and other technology companies are very lucrative. Far more lucrative than the careers listed by Update your data uncle sam. $150,000 is a starting salary for an entry-level data scientist at many companies these days!

#5 – Start a business

I see this headline and read the advice all the time. Here’s my twist. Don’t invent anything. Don’t try to change the world. Don’t try and do anything cool. Start a boring business. A boring service business. Plumbing, electricians, lawn care, pest control, or HVAC services. Great businesses and potential cash cows. They’re small businesses run by tradespeople who are not savvy business owners. Competition is not fierce. The world does not need another uber but it needs a plumber. 

#6 – Use debt to your advantage

Lots of people struggle with debt and high-interest rates. The financially savvy understand the value of debt. Low fixed-rate debt is a great tool. If you can use your borrowed funds to earn a rate of return above the borrowing costs, that’s profit. Making money on the spread is the underpinning of our banking system. 

Student Loans

Low fixed-rate student loans are a reasonable way to pay for higher education. There are many horrific, even predatory student loans out there. I’m talking about sub 5% fixed-rate student loans. If you can get them, it’s pretty solid. You can also deduct student loan interest from your taxes. This phases out as your income rises. So hopefully you make too much and can’t do this for long! 


Thirty-year fixed-rate loans under 3% are pretty great. If inflation runs above 3% then this is basically free money. The smaller the down payment the better. Keep your money invested to increase your net worth growth rate. Don’t rush to pay off your mortgage. 

Borrow from M1 finance

This is a new product that I love. M1 Finance is offering a margin loan for 2%! It’s incredible. You can borrow up to 35% of the value of your portfolio. You can use borrowed money for anything you want. It’s like a home equity line of credit but for your investment portfolio with a better interest rate. 

To get the best rate on your mortgage, you’ll need an excellent credit score. To find out your credit score and make a plan to increase, check out apps like Credit Karma. 

#7 – Automate investing

To make a million dollars investing the stock market, invest through thick and thin. Most importantly though thin. Setting up automated investing makes your life easier and richer. The money will come out of your checking account and into your investment account all by itself. You’ll never miss a month to buy more shares of low-cost index funds. You’ll buy when the market is up, down, or sideways. You’ll never be emotional and you’ll be less likely to do something dumb like the time the market. 

A lot of great investment companies offer low-cost or free automatic investing. The best product or company is the one you’ll use. 

Here are four great options to check out. 

If you’re a real investing or finance nerd, check out The Robo Report. Barron’s also puts out an annual ranking article. The Best Robo-Advisors Right Now: Barron’s Ranking

#8 – Avoid lifestyle creep

Your goal as a high achiever is to maximize your income early in your career. Making and investing money when you are young accelerates your time to millionaire. Don’t let lifestyle creep torpedo your path to making one million dollars. Fight the urges, bank your bonuses and invest that money!

Check out a more in-depth post on lifestyle creep and how to avoid it. 

#9 – Bring awareness to your spending habits

I learned this habit from Your Money of Your Life. It’s a game-changer. It’s one of those things that’s simple and kind of silly. You think to yourself, there’s no way it works. Then after a few months, you realize you don’t even need a budget anymore. You’ve aligned your spending to the things, and experiences, that matter most to you. Spending money on the right things becomes second nature. Over time, your expenses decrease. Over time, you find yourself not worrying about prices as much. You’ve found goods and services that you like, that bring value at the right price, and you focus on those things. Spending starts to manage itself. 

Okay, here’s how you start building your awareness habit. First, create a spreadsheet, with your spending categories. Define the categories of products and services that you spend money on. Go with your instinct and don’t worry about getting it perfect. You can adjust, consolidate or add new categories later. What’s important is to get started. 

I recommend two big categories or macro categories to organize your list. 

  • Necessary – The categories you need to survive, housing, food, insurance, utilities, etc
  • Discretionary – The categories to make life fun and entertaining. Wants not needs. 

It took me about 2 years to settle on my list of categories. I have 38 that fit my life well. 

Okay, next step. Start tracking your spending each month with these categories. It takes me only 15 minutes each month to do this. 

Protip – Use your credit cards or direct payments from your checking account for 99% of your spending. Then, link all these accounts to Personal Capital. Log into your account at the end of the money and all your transactions will be there waiting for you! You’ll need to adjust a few transactions and move them into the right category. It’s quick and easy and the Personal Capital algorithms get better over time. 

Once you update your spreadsheet, go back and review the amount per category. Pause on each category and ask yourself, is this amount of spending bringing me value? I am happy with this amount of spending? Do I want to spend more or less to bring more joy into my life? The first few times you do this, you’ll be shocked at how much you spend on certain categories. It’s OK, it happens to everyone. It’s supposed to happen. 

Do this every month for at least a year. I have 7 years of expenses tracking. It’s cool to have a history of your spending habits and see the trend pay off! Need help? There are great apps like Truebill that can also help. 

#10 – Optimize your costs

The monthly habit of optimizing your costs down is like weeding your garden. It keeps your finances in order and your mind clear. If something pops up or looks out of the ordinary, you can take care of it right away. As you review your expenses every month, dig into categories that don’t look or feel right. Is that recurring subscription still worth it? If no, cancel it. Don’t hesitate! Can you get the same product or service for cheaper somewhere else? Probably. Do some comparison shopping from time to time. 

Always be on the lookout for fees and recurring expenses.

Review in detail your top 5 expenses categories each month. Always look for ways to lower these big categories. Most months you may be stuck, like paying the same rent. But it’s important to keep a close eye on the biggest sources of spending. 

Need help finding and canceling unused subscriptions? Check out trim for a fun and easy way to help find the battle on spending. You also may be getting killed on fees within your 401k. Check out personal capital or bloom for insight into fees eating away at your money. 

#11 – Stay the course

Your first million is the hardest to make. Man is this an understatement. It takes a long time to go from nothing to a millionaire. Then one day you wake up feeling like you did the day before. But now you have a million dollars in your investment portfolio. 

There are good days and bad days. Good weeks and bad ones. Some yearly returns are terrifying and others make you feel like the sky is the limit. Staying the course is hard. When the market is down you are scared. When the market is up you get FOMO from other investors making even more. It’s a scary world but you have to stay calm, stay focused and stay invested.

In addition to tracking your spending, you should also track your networth. This will help you stay on track and stay motivated as you see your wealth snowball over time. You’ll find diligent tracking of your net worth is exciting! It will help keep you motivated to hustle, earn and invest as much capital as you can. 

Pro-tip. Reading helps. Reading books will build your mental resolve during times of high stress. This reduces the risk of you selling in down markets. Taking an excessive risk or YOLO’ing in high valuation markets. 

#12 – Take risks with your career

With your financial brain and life in order, you can focus on income. The only true accelerator to making a million dollars earlier and faster. 

Risk #1 – Ask for a raise. 

This is an ongoing life skill. You need to develop strategies to ask for a raise. Don’t be shy, everyone is doing it. Everyone is fighting for their piece of the pie. It’s very rare to get it by not asking. Don’t be afraid to ask!

Risk #2 – Ask for performance-based compensation

High salaries are great. It’s easy to understand and price shop across different companies. However, if you want to earn money like the top 1% then you need to know how they do it. 

Performance compensation and equity. That’s the way you get your employer to agree to six-figure or seven-figure bonuses. If you can bring in millions of dollars for the company in a way that’s easy to track, and how you get to cash the big checks. It’s very common in sales, but I’ve seen it in all different roles. Lead a key project, start a new business line. Grow an existing business. Sell the idea to your boss and your boss’s boss and negotiate for a piece of the pie. 

Risk #3 – Ask for equity

This is how you position yourself for life-changing money. When you own equity in a business, you benefit from the collective success of the entire firm. If the company does better you do better. If the company grows fast enough and big enough. You could experience a life-changing exit. Aka your company gets purchased or it IPOs and gets bought by shareholders in the stock market. Years of work turns from equity share into dollars and shares. If your company IPOs, then you can just rest and vest. You did it, you won the game. Working is now optional. 

Risk #4 – Change jobs to ladder up your compensation

Significant raises are typically easier when you jump to another company. It can be a different role or the same role. Many people find it much easier to get a 20%, 30%, or more raise when they get a new job at a competitor or similar company. I’ve seen many friends and colleagues pull this off more than once. 

How to invest one million dollars

Congratulations, you did it. You made money, you invested it, and you did something special. You made and retained a million dollars. You’re among a group of 18.6 million people that have a net worth above one million in America. Turns out being a millionaire isn’t that exclusive these days. 

Now that you have it, what are you going to do with it? Here’s the secret that no one on Wall Street what to tell you. Just invest 70% in the S&P 500 and 30% in corporate bonds. You can do this with 2 Vanguard ETFs. VOO and VCIT. That’s it. That’s all you need to do to most likely beat 90% of investors out there. 

Or take Warren buffet’s advice. 90% in the S&P and 10% in treasury bonds. You can do that with 2 Vanguard ETFs too. VOO and BND. Boom done. Go back to living your life. 

 Invest in US equities, invest in cheap ETFs, rebalance once a year, and stay the course! You can manage your portfolio for 15 minutes a year and be an amazing investor. This simple strategy doesn’t change if you have one million, 5 million, 10 million, or 100 million dollars. The market has trillions of dollars. It doesn’t care about your tiny one million dollars. 

Is one million dollars enough to retire?

Definitely maybe but aim higher. 

You’ve seen the math or read articles across the FIRE universe of bloggers. 1 million dollars at a 4% withdrawal rate is $40,000 dollars per year in income. That doesn’t include taxes. That’s a safe withdrawal rate for 30 years, not 40 or 50 years and it assumes you don’t eff anything up. Historical analysis of safe withdrawals doesn’t do stupid human stuff and screw up all the math. You’re going to make some mistakes with your spending and asset selling. 

The high achievers need to set their target in the 3 to 5 million dollar range. That’s a great landing zone. If you are lucky enough to land in the 5 to 7 million dollar range or above, you’re in good shape. To be clear, you’re not super-rich and you can’t YOLO with celebrities. But you can live a nice, intentional life and worry very little about money or working for an income. Work is optional with great simple money habits and a portfolio larger than 5 million.