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Building wealth is a journey that many aspire to, but what are the key strategies that have helped 90% of millionaires reach their seven-figure status? Financial YouTuber Erin Moriarity shares the most impactful steps you can take during your wealth-building journey. Here are the top five strategies.
1. Real Estate: The Cornerstone of Wealth
The path to millionaire status has been predominantly through real estate investment. During an episode of her show, Moriarity says statistics show that 90% of millionaires have achieved this milestone through real estate investment. Real estate, including one’s primary residence, often makes up a substantial portion of a millionaire’s net worth.
Moriarity emphasizes the importance of homeownership as a crucial step in wealth building. With the average homeowner’s net worth being significantly higher than that of renters, the value of owning a home is clear.
2. Investment and Retirement Accounts: The Wealth Multipliers
Accessible investing platforms have made wealth creation more achievable than ever. Particularly, the 401(k) has been a game-changer, being cited by many millionaires as a key component of their financial success.
Employer matching contributions in these retirement accounts can significantly bolster one’s savings. For instance, consistent employer contributions can grow to substantial amounts over a career, illustrating the power of compounded growth and the importance of capturing matching contributions.
3. Marriage: The Financial Partnership
Statistics show that married couples generally have higher net worths than single individuals at every age. The financial benefits of marriage extend beyond cost-sharing; they include tax breaks, insurance benefits, and even retirement savings advantages like spousal IRAs. Joint finances in marriage can make life more affordable and accelerate wealth accumulation.
4. Perspective on Money: Security vs. Freedom
How one views money plays a crucial role in wealth creation. Those who see money as a path toward security tend to accumulate more wealth than those who view it as a symbol of freedom or power.
This mindset often leads to conservative financial decisions, with a focus on building a safety net rather than pursuing high-risk, high-reward investments. Moriarity points out the importance of finding a balance in this approach to avoid saving too much at the expense of enjoying life.
5. Income and Money Management: The Essential Duo
While a higher income naturally facilitates wealth building, effective money management is critical. It’s not only about earning more but also about managing what you earn efficiently. Moriarity stresses the importance of living within one’s means and continually seeking growth in one’s career to increase income potential.
Bottom Line
Reaching millionaire status is not just about earning a high income; it’s about smart decisions in real estate, investments, personal relationships, financial perspective, and money management. Moriarity’s insights offer a roadmap to building wealth, emphasizing that with time, discipline, and strategic choices, anyone can embark on a successful wealth-building journey.
Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.
