Personal Finance

I make a $170k a year and I finally hit the millionaire status and I save up to 50% of my earnings

Kristin Hitchcock

Published: October 8, 2024 11:14 am

Last Updated: December 18, 2024 12:53 pm

24/7 Wall St. Key Points:

• Allocating at least 50% of your income toward savings and investments can accelerate your path to financial independence.
• Regular, disciplined investing takes advantage of compounding returns over time.
• Even with a high income, resisting the lifestyle creep is essential.
• Retiring early is possible, and may be easier than you think. Click here now to see if you’re ahead, or behind. ^(Sponsor)

In a recent Reddit post I came across, a user shared their incredible achievement of reaching millionaire status after ten years of diligent saving and investing.

However, this post isn’t just about a milestone in this specific person’s financial journey. There is a lot in their story that we can learn from.

Let’s take a look:

Consistency is Key

The Redditor emphasized the importance of consistently saving and investing. They specifically invested 50% or more of their income each month. Despite earning between $160k-$170k per year, it was their disciplined approach to investing that accelerated their growth to millionaire status.

This strategy takes advantage of the snowball effect, where investments grow exponentially over time.

A Focus on Lifestyle Control

The user was also very strict with their lifestyle. Despite their income stagnating, their wealth continued to grow.

The key lesson here is to keep your spending moderated to leave plenty of room to invest aggressively.

House Hunting in a Tough Market

The user reflects on their experience in the volatile Austin real estate market. While “time in the market” works for investments, it seems not to apply to selling real estate.

They had to have some flexibility with the market conditions. For instance, while the user is eager to purchase a new home, they have decided to stay conservative by holding cash and waiting for the right opportunity. Sometimes, you have to make hard decisions to make the right financial choice.

Slow and Steady

The journey to $1 million took this user over 10 years. This Reddit post shows the power of staying the course. While it isn’t always the most fun way to make a million, it is the most reliable way. Wealth is often gained through patience and persistence.

Looking to the Future

This poster also looked to the future. As they approach financial independence, the user is constantly planning for the future. With $1 million invested and a plan to renovate and pay off their home, there is no stagnation inbound.