The Boring Way to Become a Millionaire

A 401(k) is a kind of defined contribution pension. You deposit money into the account and your employer will match the money you deposit up to a certain limit.

Take advantage of your 401(k)

The simple, boring way to become a millionaire:

• Find a job making $50,000 per year and access to a 401(k)

• Contribute 5% of your salary to your 401(k) and receive a matching contribution from your employer.

• Diversify your investments inside your 401(k) to provide a 7% rate of return (more on that later)

• Repeat for 36 years and you are a millionaire.

How you invest your money makes a huge difference in how much wealth you can build over your lifetime.

You can’t control or predict the Market

If the global economy goes into recession the stock market will fall. There will be days the stock market takes a nose dive — it is unavoidable.

Time in the market

Investment factors you can control

The first thing you can control is when you start investing and how long you choose to keep your money in the market.

The next thing you can control is how you diversify your investments.


1) By Geographic Market

There are two ways in which you can diversify your portfolio.

- Expenses

2) By Asset Class

- Discipline

Between August 2008 and February 2009, the S&P 500 lost 41% of its value.

Those who maintained their discipline and kept their money in the market would be rewarded by a 300% increase over the next 10 years.