Many Canadian investors might enter the investing space simply with a “goal” of making money. But that simply is not a goal. So, though I’ve captured your interest in finding the secrets of millennial millionaires, it’s important to note why you might want a million dollars as a millennial.
For instance, are you trying to cut down now so you can save those funds and buy a home? Or perhaps you’re looking to take advantage of a high income and save before you have children? There are reasons for making that amount of money. And those reasons will keep you focused when it comes to making some tough decisions.
With that in mind, let’s look at these five secrets that millennial millionaires use and whether you could apply them to your own savings profile.
1. Cut it
When I say cut it, I mean cut it all. If you find those videos online of someone saying they made $1 million in three years, there’s a reason: they hardly spent a dime. That likely means eating Ramen noodles for those three years.
Contrary to popular belief, millennials are quite frugal with their money. So, budgeting carefully with the prioritization of savings and investing can often lead to a lot of cash that you can put aside. So, besides food, this might mean cutting back when it comes to rent, having a car, or anything that is costing you more money. Cut it all.
2. Make more
Side hustles are another area where millennial millionaires might be focusing on creating cash flow. However, just make sure this doesn’t take away from your day job. In fact, a great way to earn passive income might be to buckle down, work harder, and ask for a raise!
If not, perhaps start looking for another job that pays more — even if it’s the same one! These are simple ways to create extra income. Beyond that, stay away from side hustles and use what you have to create extra cash flow, like renting out parking, storage, or other items on hand.
3. Learn
Another method to continuously grow your funds is education. And, of course, that would include a focus on financial education. But you’re at Motley Fool! Even so, you can take it a step further by frequently meeting with your financial advisor to help you achieve your goals and find investment strategies that work with your budget.
4. Use tech
There are also a number of ways that millennial millionaires use technology to their advantage. This might be using artificial intelligence (AI) to learn more about a product. It could be online platforms to help you calculate and budget. Tech can also be used to create automated contributions to manage finances effectively.
5. Invest!
Then, of course, there is investing itself. Now, many millennial millionaires prioritize long-term investing rather than a short-term goal of a year or so. Remember, if you’re a 27-year-old millennial, giving yourself a decade to achieve this goal would mean less cutting and more investing.
Use what you’ve learned to make calculated risks and purpose-driven investments. For instance, you might want to create a strong base with an exchange-traded fund (ETF) that has more growth as well as dividends to reinvest.
In that case, consider an ETF such as iShares Core Growth ETF Portfolio (TSX: XGRO). While there has been some volatility, overall, it’s shown immense growth in the last five years, up 40% in that time. It also offers a 2.17% dividend yield you can use to reinvest. So, as a solid base for your millionaire portfolio, this is certainly one to consider.
