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how to become a millionaire: the first steps

How to Become a Millionaire: The First Steps

Everyone wants to know how to become a millionaire, but there is SO much information out there– how do you know where to begin?? Clo Bare was able to increase her net worth by $300k and counting in less than 5 years and she’s on track to hit a million dollar net worth in her 30s. So how did she do it? In this post she shares the first steps you need to take in order to become a millionaire.

According to Go Banking Rates, there were approximately 22 million millionaires in the US, at the end of 2020. And according to Zippia, which combined data from 14 different articles on millionaires published in the last two years, nearly 8.8% of US adults are millionaires.


Wild, huh?


That makes it seem a little less rare than some of us (me) might’ve thought.


But how exactly does one just become a millionaire??


Is it through a big windfall of money? Starting a business? Investing in risky stocks online?


Or is it perhaps a little bit more boring than that….


How to Become a Millionaire


Well, I hate to break it to you… but becoming a millionaire isn’t sexy most of the time, and unfortunately, there’s rarely any shortcuts.


Now, I’m not a millionaire (everyone reading the post immediately exits), but I am someone who was able to increase my net worth by $300k in counting in a little over 4 years and is now on the track to be a millionaire before I turn 40.


To some folks, that might be a lot. To others, it may not seem like that big of a deal.


But as someone who never thought she’d even have a net worth? I’m pretty proud of the progress I’ve made and like to think my story is a little more relatable than the dudes on the internet who got rich from working in tech.


I didn’t start with a huge windfall of cash. I wasn’t born into money and I certainly didn’t know what I was doing when I got started at the ripe ole’ age of 28.


And I also made plenty of mistakes along the way.


Yet I’m still on track to be a millionaire before I turn 40, which is 17 years earlier than the average age of a millionaire in the US.


So, how’d I do it?


Let’s get to the first things I did to make some big net worth changes in a short period of time.

How to Become a Millionaire: The First Steps

I consistently tracked my spending.  


Tracking my expenses is probably the most important thing I did to start this  journey, and it is something I continue to do today. Because I didn’t know where to start, I just took out a pen and paper and wrote down every time I  spent money. 


At the end of the two weeks of tracking, I added up all the categories. Seeing how much I spent in certain categories like going out to bars and restaurants,  essentials, and personal items, shocked me. 


Read about the first time I tracked every dollar here.


Once I realized just how much I was spending each month, I knew I had to get  really clear on where I wanted my money to go, and what I wanted it to do for  me.


So I sat down and wrote out my specific vision of what financial freedom looked like to me, including travel, being with my family and friends, and having the ability to pursue my passion projects and be in charge of how I spend my valuable time. 


Having this concrete vision to refer back to has helped me stay motivated over the last few years. 

I found the budgeting method that worked  for me.


For me, trying to handle money without a plan is like driving to a destination  without a map or directions. Creating a budget has been an essential part of  meeting goals like paying off my debt and saving for retirement


There are lots of different ways to budget, from the envelope method to zero based budgeting, to values-based budgeting to the anti-budget, where you only focus on what you need to save, invest, or put towards debt each month, and the rest of the money you can spend as you please. 


After some trial and error, I found that a zero-based budget, where you assign  every dollar a job, was the best fit for me because I love data and seeing exactly where my money is going.


Put together your own zero-based budget here with free templates and tutorials.


Since I started implementing it, the days of living for each payday are gone, and I have a system I’m enthusiastic about maintaining that doesn’t make me feel deprived. 


I used to think that my budget needed to be exactly the same every month, but that’s not really how life works. Now I use my calendar to guide my  budget, knowing that some times of year will require more expenses than others. 


These days, instead of being surprised by a higher figure at the end of a given  month, I know to adjust accordingly ahead of time. 

I focused on increasing my income.

We can’t talk about increasing net worth without talking about income. You  can cut back on your spending up to a certain point, but there’s always going to be a limit. When it comes to how much you can earn, there is no limit. 


Over the last few years, I have focused on increasing my income as much as  possible, whether that was through side hustles — like freelance social media  management, driving for Uber, and commissioning my paintings — or advocating for promotions and raises at my 9-to-5. 


At my day job, I’d regularly communicate with my boss about my intention to  grow within the company. I volunteered for more responsibility, and I kept track of all the tasks I took on outside of my scope, my successes, and the feedback I got from the people I worked with. 


When it came time for negotiations, I always had this information available for  our conversations. In the 6 years I was at my day job, I got 7 promotions and 10 raises. 


Learn more about my journey in raising my income here.

I started a side hustle that brought me joy.

My business, Clo Bare Money Coach, started somewhat unexpectedly.


In June of 2020, I was asked if I would hold a workshop about budgeting. I  agreed and had a great time. Afterwards, the attendees asked if there was a way that they could stay in touch and work with me.


And suddenly, over the rest of 2020, I had about 10 coaching clients to start. 


Teaching people how to manage their money is what brings me the most joy and purpose in my life, in part because I’ve seen just how life changing getting your finances in order can be.


And so, at the beginning of 2021, I started thinking  more seriously about where Clo Bare could go and how I could help more people.


The more the company grew, the more I considered running it full time.


I used  to think I needed money from a side hustle to completely replace my 9-to-5  income before I felt comfortable taking that leap.


Learn more about how I quit my job to run my business full time.


When I started this journey, I wanted to earn as much as I could so I could have the funds to retire early


But if I was doing work that I loved, I realized that early retirement wasn’t really my goal anymore. 


Once I realized this, I focused on saving for my emergency fund, and after I  consistently made $5,000 a month from Clo Bare for six months, I decided to give my notice at my day job. 


Watch: Why I Quit my Cushy 6-Figure Job

I made big goals smaller and more manageable.

Instead of trying to hit one arbitrary number, I’ve learned how important it is to  break things down into manageable pieces.


Focusing on hitting monthly,  quarterly, and yearly milestones, and having a mix of differently sized goals  has made this process feel a lot more achievable. 


My goals have ranged from spending $50 less on entertainment in a given month to paying off $20,000 of my debt by the end of the year, which I was  able to do in 2019, and again in 2020.


If I need to adjust my financial objectives as my circumstances change, I have given myself the freedom to do that. 


Now that I’m a full-time business owner, boosting my income and paying off what is left of my debt, for example, is still very important to me. 


But now I’m also prioritizing my investing goals too, and doing things like maxing out my Solo 401(k), and taking full advantage of my regular IRA, and taxable brokerage accounts. It was when I started investing diversely and consistently  that my net worth began to steadily increase. 


I’m pretty sure that the old me wouldn’t be able to recognize this version of  myself.


I do know one thing: She’d be super-proud of me for getting to this point. I’m not sure what the next couple of years will look like, but no matter what the future holds, I know I got this.

Ready to start your own path to becoming a millionaire?

If you’re starting on your path to becoming a millionaire, I’ve got tons of resources for you.


Grab my free money guide here or attend our next investing class here.

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how to become a millionaire the first steps

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