Episode 15

The Proven Plan to Become a Millionaire

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Show Notes

Who wants to be a millionaire?

I think the better question is, who doesn’t?

With that kind of money, you can pursue your hobbies, live an incredibly generous life, and set your family up for success for generations to come.

And in the latest episode of The Rachel Cruze Show, I’m going to tell you how to get there. Yep. Secret’s out.

Before we dive into today’s episode, why don’t you daydream for a moment? Think big. Like best-job-ever big. Ultimate-vacation big. Becoming-a-millionaire big.

When I talk with people around the country, it’s that last daydream that really trips them up. After all, landing the perfect job or going on a dream trip seems at least somewhat doable.

But how do you become a millionaire? You need family money or a salary that pays hundreds of thousands of dollars per year, right?

Wrong!

With the help of my good friend, Chris Hogan, we’re going to show you how to become a millionaire without any family inheritance money and without the six-figure income, no matter what your age—no excuses. Are you ready? Let’s hop to it!

How to Spot a Millionaire

To start, let’s learn how to really spot a millionaire. You can do this by checking out the house they live in, the car they drive and the clothes they wear. If you know what a person does for a living, even better!

Who am I kidding? Appearances tell us nothing.

Take these two fictional gals for example:

Gal 1: Lauren

  • Lauren always looks the part.
  • She dresses sharp.
  • She drives a nice car.
  • She goes skiing every spring and surfing every summer.
  • She and her husband bring home a total of $250,000 a year.

Gal 2: Jane

  • Jane looks like your average woman.
  • She shops at Kohl’s and T.J. Maxx.
  • Her home and car serve their purpose, but neither one is all that impressive.
  • She takes simple vacations most summers.
  • She and her husband bring home a combined total of $90,000 a year.

Who’s on their way to becoming a millionaire? You might guess Lauren. And I would too, if I didn’t know this little secret: Lauren and her husband owe more than $2 million in debt among their mortgage, car loan and credit cards. Jane owns a paid-for home, owes no debt, and has money saved up for retirement.

What we’re talking about here is net worth. If you really want to learn how to become a millionaire, you need to start by getting a handle on your net worth.

What is net worth? Net worth, simply put, is your assets minus your liabilities, or what you own minus what you owe.

If you’re unsure about your own net worth, take a moment to do the math. Consider money in the bank, retirement savings and anything substantial that you own outright. Then list any debts. Subtract your liabilities from your assets, and you now know your net worth!

As you can see from our example above, Lauren spends every dollar she makes (and then some). She and her husband live with a negative net worth, meaning they owe more than they own!

Jane, on the other hand, owes nothing. Every dollar she puts in the bank or toward her retirement increases her net worth.

Want to know how to become a millionaire? Increase your net worth!

In fact, my goal is that you’ll work toward a positive net worth and begin to build wealth. To do that, you’ll have to stay away from debt. All debt does is make you look better than you actually are. I first learned this lesson way back in high school.

Real Millionaires Dump Debt

When I was 16, a bunch of my girlfriends and I made plans to go to a concert together. We were so excited. The tickets cost $100 each, but I really wanted to go so I saved up. I babysat any chance I got and saved every penny I could find to pay for my ticket.

But one of my friends couldn’t go. She said the ticket was too expensive. Normally I’d understand, but she drove a brand-new luxury car! Her family had an incredibly nice home, and she was always wearing designer clothes. I was bummed that she couldn’t make it, but honestly, I was more confused.

I remember asking my mom how this girl could drive a car like that but couldn’t afford a concert ticket. I’ll never forget what she said: “Rachel, that’s what debt does. This may not be your friend’s case, but remember, debt makes people look better than they actually are.”

What you see isn’t always reality. We don’t know what’s going on behind the Instagram shot, right?

So let’s stop worrying about what others are doing and start focusing on what works.

Expert Advice on How to Become a Millionaire

In today’s episode, I’m joined by my good friend, speaker and author, Chris Hogan. He just wrote a book, Everyday Millionaires, that is based on extensive research and a study of over 10,000 millionaires in the U.S.

I think you’ll be surprised and encouraged by what he has to say. We cover the biggest millionaire myths, like:

  • Wealthy people inherited all of their money.
  • Rich people have high-paying jobs.
  • Wealthy people get lucky and make risky investments.

The truth, Chris found, is that trust-fund babies are very rare and most millionaires are self-made. Many of them never even made a six-figure salary. Instead, they grew their wealth by staying disciplined. They paid off their homes and consistently invested in a company-sponsored 401(k).

Still sound too good to be true for you? I asked Chris some tough questions from our Facebook group, questions like:

  • If someone can spare $100 a month and they’re just getting started, where should they put their money?
  • How should I do retirement savings as a stay-at-home mom? 15% of zero is still zero.
  • How often should I check my investments?
  • Where is the best place to start learning about investments?

Be sure to check out the segment to hear Chris’ helpful responses. In the meantime, let me point you in the right direction for starting out in the investment world.

Find a SmartVestor Pro near you. These vetted investment professionals have the same wealth-building values that we do, and they always put the client first. You’ll have the opportunity to ask questions and learn on your way to becoming a millionaire.

Stay-at-home moms need more than just a retirement fund.

They need life insurance too!

Make sure that your family will be taken care of with Zander Insurance.

How to Become a Millionaire: Retirement Funding

Chris Hogan and I sit down with Elle Stoss. She’s a single woman in her late 20s and is absolutely killing it! Elle just paid off her student loan debt and has built up a fully funded emergency fund. Elle wants to know how she can set up her retirement accounts and follow the course of action taken by everyday millionaires.

Join us on the show as Chris walks us through the process. You might even recognize the journey:

  1. Set aside $1,000 for emergencies.
  2. Pay off all consumer debt.
  3. Save up for a fully funded emergency fund.
  4. Invest 15% of your household income into Roth IRAs and pre-tax retirement funds.
  5. Save for your child’s college fund.
  6. Pay off your home early.
  7. Build wealth and give.

Yep, folks. Those are the Baby Steps right there! It’s a proven plan for winning with money and the best path for becoming a millionaire!

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She Works Hard Saving Money

Once again, the best part of the show is back: #sheworkshardsavingmoney. You guys are back at it with so many awesome stories. Keep ‘em coming!

My favorite from today?

“I sold my Mustang GT (my baby of 14 years) to buy a used electric/hybrid vehicle. Mainly because my husband commutes at a minimum 45 to 50 miles a day. Although a lot of tears were shed saying goodbye to the Mustang, it's been a huge blessing with fuel savings. He can make his hour commute all on one charge, and typically charges it at work so he can ride home without using a drop of gas. We've saved hundreds of dollars a month not having to pay much for gas, and when he has local travel we throw his mileage checks towards the mortgage. Doing this we've also been able to up his 401k contributions and max out his HSA.” — Kelly

Remember, friends, take control of your money and create a life you love!

Sponsors pay the producer of this show, The Lampo Group, LLC, advertising fees for mentioning their services or products during programing. Advertising fees are not based upon or otherwise tied to any product sale or business transacted between any consumer or sponsor. The following sponsors have paid for the programing you are viewing: Zander Insurance, Home Chef