From $0 to $1 million by 40: The Ultimate Wealth Blueprint
A millionaire by the time you turn 40? It sounds unbelievable, right? But if you are in your early 20s, fresh out of college, starting a new job, and have the will to become a millionaire as soon as possible, you can make that happen before you turn 40. If you’re not in your early 20’s and want a million dollars by 40, you’ll need to save, earn and invest more, than someone who started earlier. Becoming a millionaire by 40 is achievable, and here’s how.
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The first step in how to become a millionaire in your 40’s is mental. Set the goal, create a plan, decide the financial tradeoffs you’re willing to make, and you can be a millionaire at 40. You may have to give up certain experiences and possessions that many young people enjoy early in their lives. but, you might be surprised that early millionaire habits are easier, the more you practice them!
You can train yourself to stay the course and reach financial independence by 40.
How to Retire Early with $1 Million Summary
- Maximize your savings – 15% of your income, or more.
- Minimize your living expenses – Focus on needs, not wants.
- Get a side hustle – Earn extra income.
- Invest – A diversified investment portfolio can be expected to grow faster than a savings account.
9 Strategies to Help You Make Your First Million by 40
1. Start a 401(k) Early and Make Maximum Annual Contributions
Begin investing in your 401(k) or 403(b) as soon as you land your first job. Contribute as much as possible to your retirement savings account. If your employer offers a matching contribution, make sure to contribute the maximum possible to receive the employer match. For 2025, the maximum 401(k) contribution is $23,500 with an additional $7,500 if you’re older than age 50. Without a 401(k) or 403(b), you can invest up to $7,000 in an IRA with a $1,000 catch up contribution for those over age 50.
Let’s see how this strategy works to make you a millionaire by 40:
Sign up for the company 401(k) plan immediately after landing your first job. Max out your annual 401(k) contribution at $23,500. With an employer matching contribution of up to 5%, you can easily achieve $1 million by age 40.
Here’s an example of how to become a millionaire (almost) by age 40 if you start investing at age 23 and contribute the maximum amount every year.
These assumptions include an employer contribution of 4% of your salary. Assume your salary is $80,000, so the match would be an additional $3,200.
Assumptions:
- Invest $23,500 plus the $3,200 employer contribution, starting at age 23 for a total of $26,700 per year, or $2,225 per month.
- Earn an average of 8.0% annual return – by investing in a diversified portfolio of stock and bond funds.
- After 17 years, you’ll have nearly a $1 million net worth by 40.
image/data credit: calculator.net/future-value-calculator
For a sophisticated, free retirement calculator, plus investment management tools, check out Empower. Link or manually input your financial data, test out various scenarios to calculate how to be a millionaire by 40. I use Empower to review my investments and plan for retirement!
2. If You’re Self Employed – Open a Solo 401(k) or SEP IRA
If you are self-employed, you won’t have an employer-sponsored retirement plan, but that should not stop you from being a millionaire by 40.
Two of the retirement plans designed for self-employed individuals include: Solo 401(k) and SEP IRA.
A solo 401(k) is a 401(k), but it’s designed for a single participant (spouse can be included). In this plan, you are both the employer and the employee, so you can make contributions as an employee and as an employer. Just like the employer-sponsored 401(k) plan, you can make the ’employee’ contribution of up to $23,500 for 2025. And an ’employer’ contribution can be up to 25% of your income. The maximum aggregate solo 401(k) contribution in 2025 is $70,000 plus a $7,500 catch up contribution, if you’re over age 50.
Contributing the maximum to your solo 401(k) can surely propel you become a millionaire by 40.
Another option for a self-employed individual is a Simplified Employee Pension or SEP IRA. You can contribute up to 25% of your net self-employment income to the plan with a maximum of $70,000, in 2025.
In most cases, the solo 401(k) is a better option to make a million quickly. You can also add an IRA to increase your total retirement contribution.
3. Buy Real Estate
One of the best ways to become a millionaire is through buying real estate. You can even buy real estate in a self-directed retirement account.
One way to become a millionaire by age 40 is through making 401(k) real estate investments. Real estate investing promises a high ROI with little risk.
You generally cannot invest directly in real estate through an employer’s 401(k) plan, unless there’s a real estate investment fund on the plan’s investment offerings list.
You can even buy real estate like you purchase a stock through a REIT. A REIT is a type of investment that deploys your money into a wide range of real estate investments. Sample REITs:
- VGSIX-Vanguard U.S. REIT Index Mutual Fund
- VNQ-Vanguard U.S. REIT Index ETF
- RWR-SPDR Dow Jones Index REIT ETF
- VNQI-Vanguard Global ex-U.S. Global Real Estate ETF
- FGL-iShares Developed Real Estate (ex-U.S.) ETF International Fund.
- RWX- SPDR Dow Jones International Real Estate exchange-traded fund
There are also scores of sector REITs that invest in office buildings, storage units, university housing, nursing homes, data centers and more.
One of the newest ways to invest in real estate is through real estate crowdfunding. Like the name suggests, you’re able to partner with other investors to invest in large real estate projects of various types.
Invest in real estate on your own, or with a partner and benefit from many tax benefits. You can then rent the real estate out or fix it up and resell it. Buying real estate can be a good strategy to gain cash flow and appreciation.
I have a Groundfloor Investing account, a platform where you can lend to others who are buying real estate and receive higher than average returns.
4. Maximize Your Savings
Most financial experts recommend saving 10% to 15% of your income towards your retirement. But, here we are not talking about retirement. We are talking about becoming a millionaire before turning 40 (25 years before a typical retirement age). Depending upon your income, and the area in which you live, you might consider saving and investing 30%, 40%, or 50% of your income.
If you start at age 30, here’s how much you’ll need to to save and invest to become a millionaire by age 40.
Become a Millionaire in 10 Years
- Invest $5,417 per month. This might include a salary deduction into your 401(k), an employers contribution and an additional investment in a brokerage account.
- Earn an average of 8.0% annual return – by investing in a diversified portfolio of stock and bond funds.
- After 10 years, you’ll have nearly a $1 million.
image/data credit: calculator.net/future-value-calculator
That means, not only would you invest within your retirement account, but you would also need to invest in a traditional brokerage investment account or with a robo-advisor like Wealthfront (sign up bonus).
5. Diversify Your Investments
If you want to become a millionaire before 40, you need to keep adding to your savings and investing the money so that it grows. Since the financial markets fluctuate, it is wise not to keep all your eggs in the same basket, so that when one investment stumbles, you’ll have others to boost your returns.
The best way to build wealth while protecting your assets is to build a diversified investment portfolio. Put your money not only in stocks and real estate, consider different asset classes to balance the risk.
There are folks who invest in real estate debt, websites, mobile home parks, collectibles, currency, private equity and more. These might be riskier than typical stock, bond, and real estate investing.
Reinvest your dividends and profits back into the investment markets and let the returns compound. This allows your money, to work for you. Actually, reinvesting your dividends is one of the few, truly passive income ideas.
Bonus: 10 Best Alternative Investments
6. Start a Side Hustle
One of the secrets of the wealthy are that they have multiple streams of income. That way, if one source of income dries up, you’ll have others to offset the loss.
There are many creative ways to make extra income. The gig economy has made it very easy to pick up extra cash, on the side.
- Driving for Uber, Lyft, Door Dash and other sites
- Task Rabbit and Fiverr allow you to sell your services on busy websites that match up sellers and buyers.
- Set up a store on Etsy or Ebay. Try arbitrage by picking up items cheaply at Goodwill, Facebook Marketplace or Craigslist, and reselling them at higher prices.
- Then there’s the old fashioned way of selling by setting up a booth at a swap meet to sell baseball cards, crafts or water.
It’s also easy to advertise locally through Craigslist. For example, was a guy with a truck that picked up junk and transported it to the dump for big bucks.
The key with any side hustle, is to make sure that you save and invest the extra money.
7. Find a Higher Paying Job or Ask for a Raise
Many people are afraid to ask for a raise. How to get a raise involves tracking your accomplishments and value add to the organization. Use that information, comparative salary statistics, and the promise of added initiative and detailed contribution to advocate for yourself. It’s not useful to claim that “you need a raise.” It’s best to stress what you bring to the organization that substantiates your value.
If asking for a raise doesn’t work, or if you’re ready for a change, seek out a higher paying job. Be prepared to document your accomplishments and skills. Stress what you can bring to a new employer. Don’t be afraid to negotiate for a higher salary, after an offer is made.
If you don’t ask for more money, it’s rare to receive it. The worst a prospective or current employer can say is “No.”
For financial guidance, WiserAdvisor vets fee-only financial advisors and matches you with three in your area.
8. Live Modestly
It’s unrealistic to live large and save a lot simultaneously if you want to be a millionaire in your 40s. It doesn’t work.
The Millionaire Next Door details the stories of average men and women who have amassed a million dollars, while living a simple life.
If you want to amass a million dollars fast, you need to live well below your means. That means, making the conscious decision to live simply and forgo many of the luxuries and “perceived necessities” of today.
You may even wish to surround yourself with friends with a similar mindset. It makes it easier to become a millionaire by 40 if you’re in the company of others with similar goals.
There are a surprising number of groups that focus on minimalist living, FIRE (financial independence, retire early) and “buy nothing” approaches. You can find Facebook groups and forums that include many others striving for a simple life and aggressive wealth accumulation.
9. Track Your Net Worth
Your net worth is the value of your investments, savings accounts, house, and other assets, less your liabilities or what you owe.
Why is it important to track your net worth? It allows you to monitor your progress. Tracking your net worth is also motivating. When you see that your wealth-creation strategies are working, you’re more likely to continue. Even when the financial markets suffer a periodic decline, you’ll be able to study your overall progress. This will help you stay on track with your goals.
The Empower free investment management tools are an easy way to track your net worth.
FAQ
As you can imagine, this is a tough statistic to uncover. Yahoo reported that the Visual Capitalist found that the wealthiest people earned their first $1 million at age 36. Be aware that this is not a representative sample of all millionaires.
To make $1 million by age 40, you’ll need to delay gratification, a disciplined saving and investing plan, and likely your own business, in addition to a typical job.
Get really lucky. But, in the process of becoming lucky, you may take on too much risk and lose an excessive amount of money. Ways that people have become a millionaire in a year are to buy into a stock or cryptocurrency at the right time and experience a million dollars of capital appreciation. Very lucky and/or skilled day traders might become millionaires in a year. But it’s more likely that they will lose their initial investment, than it is that they will end up with $1 million.
In general, those seeking to become a millionaire in one year are looking for an easy way to wealth building, and that is very unrealistic.
There is more than one way to become a millionaire. With the power of compounding, and regular investing, is not out of reach for most working people. Over 40 years, if you invest in the financial markets regularly and earn approximately 8% per year, you can become a millionaire with an annual $3,574 investment. Open an IRA at age 24 and contribute at least that amount every year in a diversified portfolio of stock and bond funds, and it’s likely that at age 64, you’ll be a millionaire. Other ways to become a millionaire faster are to invest more money, take on a side-hustle, cut expenses and divert the savings to an investment account, and invest in real estate.
While not impossible, becoming a millionaire in 5 years requires earning a lot of money while saving and investing most of it! Here’s a viable path to becoming a millionaire in 5 years:
-Get a degree in a high paying field like cyber security or software development. Get a job paying $200,000 or more.
-Start a side hustle, consult and make more money.
-Eliminate all debt, cut expenses to the bone, and live on 25% of your income.
-Invest the rest in an aggressive stock market portfolio (and hope your timing is good!). Contribute to 401(k) and/or IRA.
-Consider investing in undervalued real estate, upgrading it and reselling it for a large profit.
Statistically, about a third of 1% of the population are millionaires by age 40. But if you want to be in that group, you have to be ready to commit time, effort and lots of money to reach the million-dollar mark. And it’s not going to be an easy journey.
Related
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- 9 Biggest Retirement Planning Mistakes: 401(k) Blunders To Avoid
- Become A Millionaire In One Step
- How To Save For Retirement At 30 And Become A Millionaire
- How To Catch Up On Your Retirement Savings
- 15 Best Warren Buffett Investing Quotes
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