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I Made A Million Dollars By Age 34 — Here's How
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The Feminist Financier
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When people set money goals, many think about becoming a millionaire as the ultimate objective. Like most ambitions, figuring out how to make a million dollars — and actually doing it — will take time; steady year-over-year gains in earnings and investments are usually required. Income growth may come from salary increases, the purchase of profitable rental properties, and other compensation from side hustles or projects. For people who invest in the market, the amazing power of compound interest over the years is a valuable wealth accelerant.

When I graduated from business school, my aim was to become a millionaire by the time I turned 40. I achieved my goal early; by 34, I had accumulated over $1M in invested assets alone. Invested assets include retirement accounts, savings, and other investment accounts.

According to the Credit Suisse Global Wealth Report, there are 13,554,000 millionaires in the United States. This is nearly 4% of the population. In comparison, the median wealth per adult is $44,977; average is $344,692. There’s a big difference between the median and the average because the top 1% holds tremendous wealth in the U.S.

So, do you want to know how to make a million dollars? Let me share my story. I’d be remiss if I didn’t first acknowledge my privilege. I grew up in a middle class suburb in the Midwest. My parents were the first generation in our family to go to college (on both sides). We were a blue-collar family that talked about money, watched our household budget, and always had a roof over our head. My parents also paid for much of my college costs, providing me with a strong financial foundation. I owed around $25,000 in student loans when I graduated from my undergraduate business program, less than many of my peers.

After graduating, I chose a career with very high income potential. It’s grossly unfair that some of the most meaningful work in education, social work, the arts, and elder care does not pay well. If money was no object, I’d have pursued a career in the arts or education. But, the reality is that the top-paying jobs are usually in science, technology, and business fields. The 61 top paying majors that tend to make people a lot of money span a wide range of interests and indicate the median salary after five years of work experience.

Are there millionaires in other fields? Absolutely. However, it can be more difficult to make a lot of money in those fields, and it’s important to understand salary and earnings data in order to set realistic financial targets.

I work in management consulting and selected this field because it requires creativity and continuous education, allows me to travel the world, and pays tremendously well. My base salary has grown to be 5x what I made in my entry-level position. Other perks, like bonuses, profit-sharing, paid time off, and high quality benefits contribute to my compensation package, which has strengthened over time.

If you’re feeling frustrated with your current income, take a look at these suggestions on how to grow your current income. Negotiating your pay is also part of the equation; as you develop in your career, keep a careful log of your success, quantifying the value you’re adding for your employer. We all know there is a frustrating gender pay gap, which is even more severe for women of color; growing our income, asking for more, and supporting other women can be critical components.

I saved and invested, early and often. When I graduated high school, I had built a small nest egg from my part-time jobs, which I began at age 13. I invested this cash savings in mutual funds and stocks just before I turned 20. I’ve continuously purchased additional mutual fund shares to add to this investment over time.

When I started my career, I invested in my company’s 401(k) plan, which had a modest match, and increased my contributions consistently until I reached the maximum allowable by law. Investing in the 401(k) was relatively painless, since it was deducted directly from my paycheck. I never even had a chance to see, or spend, the money!

Investing early and often is the surest path to wealth. When you invest in mutual funds and exchange-traded funds (also called ETFs), you are investing in many companies at once. This allows you to spread risk and capture a variety of gains. If you haven’t started investing, don’t fret. The best day to start is today; begin researching so you can start investing immediately.

When it comes to investing, men are generally more confident about investing, while women are more goal-directed and trade less. Women tend to keep 10% more of their savings in cash than our male counterparts. Millennial women report a lower level of financial comfort. On average, we are less likely to feel “in control” or “confident” about our financial future.

If you’re new to investing or feel like you have no idea how to get started, I’ve created a simple guide to start investing in four steps. It’s a jargon-free primer on the four decisions you’ll need to take to start building real, meaningful wealth on your path to becoming a millionaire.

I kept a very close eye on my expenses. When income increases, it can be very tempting to let your expenses grow each month — but it’s a good idea to keep yourself in check. We work so incredibly hard for our money; when we get a raise or bonus, it’s nice to allow for a special, valuable treat. However, a one-time treat is one thing - buying a larger house, or purchasing a spendy car can permanently add to your household bills.

I track every cent I spend, which helps ensure I’m not falling prey to the sneaky ways we spend more than we mean to. Since the gap between income and expenses is where millionaires are made, I work hard to spend far beneath my means.

This doesn’t mean I deprive myself. Instead, I use a “save to spend” approach. For example, I have a special travel savings account that I transfer money into monthly. I’m currently saving for a trip to Europe; when that account reaches my budgeted amount, I’ll start my planning in earnest.

I talk openly about finances with my partner and have a prenup. A few years ago, I heard a financial advisor speak, and he was asked about the number one money problem he sees among his clients. He ruefully replied, “It’s actually divorce - which hurts my female clients significantly.”

No one wants to think about divorce, but the sad reality is that it occurs with some regularity. Women’s finances are hit disproportionately hard by divorce; on average, their income drops 40% (while men face a smaller decline of 25%). Infuriatingly, the standard of living actually rises for many men in the first year after a divorce. Women face a 27% decline, while men may see an increase in up to 10%. Note that most of the data on women and divorce is for heterosexual couples.

While any legal agreement can be challenged, the paperwork is symbolic of a larger discussion that partners should have regarding financial assets, assumptions, and fairness in the event of a (hopefully unlikely) separation.

Importantly, talking with my partner regularly about money helps keep me motivated and identify (and act on) gaps. We are financially intimate, which means we share financial information and don’t hide anything related to money. In times of stress, like when I had over $10,000 of credit card debt, talking openly and regularly about the situation with my partner kept me focused and alleviated the shame and embarrassment I felt from accumulating so much debt.

Those are the four ingredients to this millionaire businesswoman:

  • Choose a high-income career that aligns with your passions and interests
  • Invest early, and often to take advantage of compound interest and make investing a habit
  • Keep a close eye on your expenses and avoid unintentional over-spending
  • Talk openly about finances with your partner (if you are partnered); and start talking about money with your girlfriends and people who are likely curious and want learn more, just like you do

I look forward to hearing about your financial successes, as you continue your path towards your first (or second, or third) million!

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The Feminist Financier is on a mission to help women build wealth and own their financial independence, by improving financial literacy and taking the mystery out of money. Ms. Financier is also a shoe addict, travel fanatic, and wine enthusiast.

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