Michael Zeligs, MST – https://www.linkedin.com/in/michaelzeligs/

We found Common Sense Ways to Reach $1M by Age 45

Hitting that million-dollar mark by age 45 isn't just for Wall Street hotshots. With some discipline and smart moves, anyone can get there—even if you're earning $16 an hour. But let's be real: it's not just about what you earn; it's about how you spend.

1. Ditch the Daily Money Drains

Skip Starbucks

Your daily latte habit might be costing you more than you think. If you're spending $5 a day on coffee, that's $1,825 a year going straight to caffeine. Brew your own at home and pocket the difference.

Bring Your Own Lunch

Eating out for lunch every day? At $10 a pop, you're looking at $2,600 a year. Instead, pack a lunch. It's healthier and keeps more cash in your wallet.

Say No to Booze and Drugs

Alcohol and recreational drugs aren't just bad for your health—they're terrible for your finances. Cut these out and you'll save a hefty chunk of change while boosting your overall well-being.

2. Bulk Up Your Savings

Buy in Bulk

Shopping in bulk can save you a small fortune. Stock up on essentials like toilet paper, cleaning supplies, and pantry staples at warehouse stores. It reduces the number of trips you need to make and saves you money in the long run.

3. Supercharge Your Retirement Savings

Max Out Your IRA

Individual Retirement Accounts (IRAs) offer great tax benefits. Contributing to a Roth IRA lets your investments grow tax-free. For 2024, you can contribute up to $6,500 annually, or $7,500 if you're over 50. That's a solid step towards your million-dollar goal.

Solo Roth 401(k)

If you're self-employed, a Solo Roth 401(k) is a game-changer. You can contribute both as an employee and an employer, potentially stashing away up to $66,000 a year. That's a massive boost to your retirement fund.

4. Get Serious About Savings Returns

High-Yield Savings Accounts

Park your cash in high-yield savings accounts. These accounts offer better interest rates than traditional savings accounts, sometimes over 2%. It's a no-brainer for growing your savings with minimal risk.

Senior Loan Funds

Look into senior loan funds like the Invesco Senior Loan ETF (BKLN). These funds offer an attractive yield of around 8% with nearly zero beta, meaning they have low variability. It's a smart way to get a steady income from your savings.

“Investing in high-yield, low-beta funds like BKLN can significantly enhance your savings' growth while minimizing risk.”
Source: Forbes

5. Re-Invest Your Earnings

Compound Your Returns

Reinvesting your dividends and interest payments can exponentially grow your wealth. The power of compound interest means your money earns money, which in turn earns more money. It's the ultimate strategy for long-term growth.

“Reinvesting your dividends and interest can accelerate your journey to reaching a million-dollar net worth.”

Wake Up to Your Spending Habits

Let's call it out: even those making $16 an hour can fritter away up to $3,600 a month on discretionary expenses. Whether it's those daily lattes, impulsive lunches out, or casual shopping sprees, it adds up fast. If you're using credit cards to fund this lifestyle, you're digging a deeper hole with interest.

Final Thoughts

Reaching $1M by age 45 isn't just a pipe dream. By cutting out unnecessary spending, buying smart, and maximizing your savings and investments, you can make it a reality. Start now, be consistent, and watch your wealth grow.

For more tips on smart spending and investing, check out Forbes and Investopedia.

Michael is the Editor in Chief and Director of Start Motion Media, a Studio Agency. https://www.startmotionmedia.com

StartMotionMedia

5 Ways to Reach $1M by Age 45