There’s simply so much wealth building advice out there that it’s easy to feel a little overwhelmed. If you ask ChatGPT "how to become a millionaire," you’re likely to get a flood of endless money hacks, conflicting advice and complex economic theory.
But you don’t need any of that to get into the seven-figure club. In fact, you can chart a course to the $1 million milestone by simply focusing on three essential numbers. Here’s a closer look at these crucial wealth building blocks.
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Net worth
You can’t make intentional progress if you don’t know where you currently sit. That’s why the most basic number you should be tracking on a consistent basis is your net worth.
Although calculating your net worth should be relatively easy, most Americans wouldn’t know where to start. Only 54% of those surveyed by Pew Research in 2023 said they knew a great deal or a fair amount about personal finances, which means nearly half of all adults could be struggling to measure their wealth and financial status accurately.
Fortunately, you don’t need sophisticated tools or AI to track your net worth. A simple spreadsheet that lists all of your assets and liabilities and calculates the difference between the two should suffice.
Savings Rate
If you’re trying to build wealth, tracking the amount of money you or your family save in any given year is an essential task. In fact, if you can monitor and raise your savings rate high enough to meet your savings goal, you can make your journey to millionaire status a lot shorter.
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Unfortunately, most American families are struggling to save much. At the end of May 2025, the personal savings rate was just 4.5%, according to the St.Louis Federal Reserve.
A family earning $100,000 a year would save just $4,500 a year at this pace and would take 222 years to get to $1 million in savings. But, by contrast, if the same family can raise their annual savings rate to 20%, it would take them just 50 years to get to that target.
This is why tracking and boosting your savings rate is so crucial for wealth building and why so many millionaires and billionaires are notoriously frugal.
Rate of return
The final ingredient in the wealth creation recipe is the rate of return on your savings.
Where you place your savings is just as important as how much you save. If you’re stacking $20,000 a year under a mattress, you will take several decades to get to millionaire status and by the time you get there, inflation would have drastically reduced the value of a million dollars anyway. Instead, if you invest in robust growth stocks, real estate, or fixed income opportunities, you could get to the seven-figure club a lot faster.
The Vanguard S&P 500 ETF, for example, has delivered an annualized return of 14.55% since its inception in 2010. If you assume a similar return going forward and invest $1,000 a month, you could reach the $1 million target in less than 20 years.
For someone with a diversified portfolio spread across bonds, real estate, stocks and cryptocurrency, it’s essential to measure the total combined return on all your assets every year to see if you’re making good progress towards your goal.
With these strategies in mind, you’re well on your way to joining the millionaire club.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
