5 Steps to Become a Millionaire
- Coach Al
- Dec 29, 2025
- 6 min read
Creating financial freedom requires you to simplify the complex world of money into five clear, actionable steps that anyone between 10 and 40 years old can follow. By understanding how to manage your money, build credit, invest wisely, and protect your assets, you’ll gain the knowledge and confidence to make smart financial decisions for life. Instead of chasing risky or trendy money moves, this guide helps you focus on the proven, long-term strategies that actually create wealth.
Step 1: The Benefits of Financial Literacy
Financial literacy is the foundation of wealth. Without understanding how money works, it is impossible to make informed decisions about saving, spending, and investing. Wealth matters because it absorbs financial shocks without crisis, funds education, entrepreneurship, and homeownership, supports retirement and later-life stability, and provides resources to transfer to children and grandchildren. Economists often emphasize that wealth, not income, is what determines long-term security and power in the economy. Creating financial security will require household-level discipline and mindset shifts from spender to saver. For young adults, financial literacy provides the roadmap for avoiding costly mistakes and building a secure financial foundation.
How to Build Financial Literacy:
Read books like ‘The Millionaire Next Door’, ‘I Will Teach You to Be Rich’, or ‘Dare To Succeed—Finding Passion To Fuel A Purpose-Driven Lifestyle’.
Follow trusted financial educators online and avoid hype-driven sources.
Take free financial literacy courses available through government or nonprofit programs.
Watch experts on YouTube to learn the fundamentals of wealth building.
Watch experts on podcasts to learn the details of implementing each element necessary for building wealth.
Track your income.
These simple habits build heart strength and set a positive example for kids.
Step 2: Change Your Relationship With Money
Your money mindset drives your habits. Shifting from short-term spending to long-term investing is essential for wealth building. This means living below your means, prioritizing savings, and building a system that keeps you financially safe. Coach Al wrote the book ‘Dare To Succeed—Finding Passion To Fuel A Purpose-Driven Lifestyle’ to help teenagers, young adults, and their parents understand how to be successful. Part four of the book is dedicated to changing your relationship with money.
Spenders versus Savers
Changing your money mindset from spender to saver is a key step toward building financial stability. When you focus on saving, you’re actively setting aside resources for future needs and emergencies, rather than spending impulsively on short-term wants. This shift helps you develop disciplined financial habits, such as budgeting and tracking expenses, which are essential for reaching long-term goals like buying a home, starting a business, or retiring comfortably. By prioritizing savings, you gain greater control over your finances and reduce the stress of living paycheck to paycheck.
Adopting a saver’s mindset also means viewing savings as a regular, non-negotiable part of your financial routine. Instead of waiting to see what’s left at the end of the month, you make saving a priority from the start. This approach not only helps you build a financial cushion for unexpected expenses but also encourages smarter spending decisions. Over time, these habits reinforce a sense of financial security and empower you to make choices that support your future, rather than just your present.
Budgeting
A budget is a plan for your money. It ensures that every dollar has a purpose. The 60/15/25 rule is a simple starting point: 60% for needs (housing, medical, food), 15% for wants (entertainment, travel), and 25% for savings (retirement, wealth building, emergency fund, college). Use budgeting apps like Mint, Monarch, or YNAB to automate tracking and goal setting.
Emergency Fund
An emergency fund protects you from unexpected expenses such as job loss, car repairs, or medical bills. Aim for at least 3 to 6 months of living expenses. Keep this money in a high-yield savings account for safety and ease of access. Avoid investing your emergency fund—it should always be liquid and readily accessible when needed.
Financial Safety and Security
Protecting your money is just as important as earning it. This includes having adequate insurance (health, renters, auto), avoiding unnecessary debt, and securing your online accounts with strong passwords and two-factor authentication. Consider identity theft protection services and monitor your credit report annually through AnnualCreditReport.com.
Step 3: Build a Great Credit Score
A strong credit score (above 740) opens the door to lower interest rates, better loan terms, and greater financial trust. It can save you tens of thousands of dollars over your lifetime and is a cornerstone of long-term financial success.
How to Build and Maintain an Excellent Credit Score:
Always pay bills on time, as payment history accounts for 35% of your score.
Keep credit utilization below 10% of your total available credit.
Maintain a long credit history by keeping old accounts open.
Use a mix of credit types, such as credit cards, auto loans, and student loans.
Limit new credit applications to avoid hard inquiry penalties.
Consider tools like Experian Boost or rent-reporting services if you are new to credit or looking to improve your current credit score.
Building and maintaining an excellent credit score requires consistency. Treat credit as a financial tool, not free money. Use it strategically and, if possible, always pay balances in full to avoid interest and debt accumulation.
Step 4: Invest the Slow and Boring Way to Become a Millionaire
The secret to becoming a millionaire is consistency. Wealth is not built overnight but through small, steady investments that grow over decades. This approach reduces risk while maximizing the power of compound growth. Coach Al specializes in helping parents turn their kids into millionaires. Ask him how simple it is at Tips4Living.org.
How to reduce your investment risks:
Open and contribute to retirement accounts like Roth IRAs or Traditional IRAs as early as possible.
Invest in low-cost index funds and ETFs that track the overall stock market (such as the S&P 500).
Explore real estate investment trusts (REITs) for property exposure without direct ownership.
Automate contributions through payroll deductions and use robo-advisors for the lowest fees.
Reinvest dividends to accelerate compound growth over time.
Diversify your investments to balance risk and avoid overexposure to any single asset type.
In addition to investing, consider side income streams such as selling digital products, creating online courses, or freelance work. These earnings can be directed into your investment accounts to increase your wealth faster.
Avoid high-risk trends such as cryptocurrency speculation or get-rich-quick schemes. The ‘slow and boring’ approach may not be flashy, but it is the most reliable path to become a millionaire.
Step 5: Estate Planning
Estate planning ensures that the wealth you build is protected and passed on according to your wishes. It is not only for the wealthy, but everyone should have a plan in place to protect their assets and loved ones.
Key Elements of Estate Planning:
A will to specify who inherits your assets and how they should be distributed.
A living trust to avoid probate, maintain privacy, and ensure your assets are managed efficiently.
Beneficiary designations on retirement accounts, insurance policies, and payable-on-death accounts.
A durable power of attorney authorizes someone to make financial decisions if you are unable to do so.
Healthcare directives outline your medical care preferences in case of incapacity.
Your living trust owns most of your assets.
Beyond legal protections, estate planning is about defining what matters most to you. Consider how your financial legacy can reflect your values and goals, even at a high level.
Final Thoughts on Becoming a Millionaire
Becoming a millionaire is possible for any disciplined young adult. The steps outlined here, mastering financial literacy, building strong money habits, protecting your finances, investing steadily, and planning for the future, create a clear, repeatable path to wealth. Start today, stay consistent, and let time work in your favor to become a millionaire.
Helpful Resources:
Tips4Living Magazine 2025: Health Edition - Get it now
Health Improvement Community Forum Group - Join now
Health Tips with Nurse Dee Podcast - coming soon
Evidence-Based Weight Loss by Dr. Michael Greger - NutritionFacts.org
Subscribe to our free monthly newsletter - Subscribe now
Dare To Succeed Book by Richard A. Sherrod Sr. - Get it on Amazon
Dare To Succeed Podcast - coming soon
Get our free eBook - Change Your Money Mindset - by understanding your values
Get our free 30-page eBook - Budget Like A Pro
Get our free guide - Wealth Building Readiness Checklist
Free Goals Tracking Form - download here - go to the bottom of the page for templates.
Free Personal Development Plan Form - download here - go to the bottom of the page for templates.
Certified Life Coach support - https://www.tips4living.org/consulting
Dare To Succeed Podcast - coming soon
Wealth Building Community Forum Group - Join now
Podcast QuickStart Guide for beginners - Get it now
FICO Credit Score Improvement Guide eBook - Get it now
Prevent Scams & Identity Theft Guide eBook - Get it now
Managing Money workshop - https://www.tips4living.org/workshops
This article was so impactful. Creating financial freedom is an empowering journey that opens the door to living life on your own terms.
I am amazed by the number of people who are becoming millionaires. Most of them say them invested a couple hundred dollars every month over a few decades and were surprise that it got them to millionaire status.