10 money rules that helped me become a millionaire at 28

Olga M. | Twenty20

There are roughly 11.8 million Americans with a net worth of at least $1 million, making up 3% of the U.S. population, according to Spectrem Group's 2019 Market Insights report. Although being a millionaire today isn't what it used to be, reaching that milestone is still a significant achievement.

Before I became a millionaire at 28, I told myself I was either going to make it or be an absolute failure by the time I turned 30. The fear of having no job, no savings, no investments and no option to retire early kept me motivated.

There's no "secret formula" to amassing wealth. But I can tell you that road to becoming a millionaire is much easier when you're in your 20s: You have more energy, less dependents and little to lose.

Here are the 10 money rules that helped me reach a $1 million net worth at 28:

1. Stay focused in school

Slacking in school won't get you anywhere. Your binge-watching habits will only hurt your GPA. There are tons of people who graduate in the top 1% of their class every year. Be one of them. You're paying thousands of dollars for your education, so why not take advantage of it?

You can keep insisting that grades don't matter, but it won't change the job market competition. While some prestigious companies will tell you that "GPA isn't the whole story," it doesn't mean they won't ask for your transcript — because believe me, they will.

Graduating with a 3.78 GPA helped me land a job at Goldman Sachs. But it still wasn't easy. I spent six months aggressively applying for jobs and went through 55 interviews before getting an offer.

2. Save until it hurts

I was once a poor college student, so just landing a job with any consistent salary made me feel rich. But I continued living like a student for years even after my first full-time job. It took a lot of willpower and discipline to save as much as I did.

I didn't make excuses as to why I needed nice clothes or a new car. I shared a tiny studio with a friend for two years to keep my living costs low. That allowed me to max out my 401(k) on a modest salary and also save another 20% of my 401(k) cash flow.

Try to save at least 20% of your after tax income every year, no matter what. Remember, if you're not in pain from the amount of money you're saving each month, you're not saving enough.

3. Work hard and know your place

Working hard takes absolutely no skill. I promise that if you're the first person in the office and the last to leave, you'll get ahead. Pay your dues early and you can relax when you're older. Will your social life suffer? A little bit, yes. But you're young, remember? Your energy is limitless!

Early in my career, I got to work at 5:30 a.m. and left after 7:30 p.m. I learned a lot, got more done and gained the respect of my peers. And because my boss recognized my hard work ethics, I was able to save my job during the 2000 dot-com bubble burst.

4. Consider both aggressive and conservative strategies

Investing in an S&P 500 index fund is fine, but if you want to get rich fast, I recommend making more high-risk bets. You can land bigger wins for a small portion of your portfolio.

Don't go crazy and blow all your money away, but be willing to experiment with aggressive investment strategies. Like I said, when you're young, you have very little to lose.

When I was 22, I only had about $4,000 to my name. Regardless, I invested 80% of my money in one stock and got a 5,000% return. Part of it was luck. But I did my research, took a big risk and it paid off.

5. Make property your best friend

Inflation is a beast. Make it a goal to own a primary residence as soon as you know where you want to live for the next five to 10 years. If you put a 20% down payment on a home and it goes 3% up per year, that's a 15% return on your cash.

At 26, I used the lucky win I made from one stock investment and bought a two-bedroom, two-bathroom condo in San Francisco for $580,500. The mortgage has since been paid off and the property now generates a steady stream of income.

6. Live like you're poorer than you actually are

The richer you become, the more frugal and low-key you should be. Too many young people waste money on things they don't need — simply to show off to their friends or on social media.

There's no shame in being young and poor. Drive a cheap car. Live in a modest home. Don't eat out every day. Don't buy clothes you don't need (thanks to Mark Zuckerberg and Steve Jobs, wearing the same thing every day is cool). And then be the unassuming millionaire next door.

Once I became a millionaire, I purchased a six-year-old car and drove it for the next 10 years. After that, I leased a Honda Fit and drove it for three years. I still wear the same casual athletic clothes I wore in my 20s.

7. Start a side hustle

You can make money by working a full-time job or by starting a business. Better yet, you can do both. Over time, your side hustle might turn into a big business that will generate even more income than your full-time job.

In 2009, I launched Financial Samurai as a way to make sense of all the financial chaos. Little did I know that the site would grow so big and so fast. It gave me the confidence to negotiate a severance in 2012 and leave my full-time job for good.

8. Build a strong support network

To get ahead, you've got to build as many allies as possible. Being a hard worker isn't enough. You have to talk to people, show an interest in them and get them to like you.

Once you have someone with significant power on your side, your entire career will advance much faster. I always made it a point to take a colleague out for coffee at least once a week. Building deep relationships helped me get promoted to vice president at 27.

9. Invest in your education

Your brain is your greatest asset. A strong education is the most valuable thing you have, so keep expanding your knowledge — even after college. Thanks to the Internet, you can now learn almost anything for free.

After completing my part-time MBA program, I continued taking courses to stay up to date with everything finance-related. That also fueled me to keep writing on Financial Samurai — and the more I did, the more money I made.

10. Keep track of your progress

The amount of money you save is more important than the amount you earn. I know tons of people who made millions and then ended up broke a few years later because they had no idea where their money went.

Take advantage of free financial tools online. Track your cash flow, analyze your investment portfolio, calculate your financial needs in retirement — just stay on top of your finances.

I've been using a free online wealth management tool since 2012. By diligently tracking my net worth, I've been able to optimize my wealth to the fullest.

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