How do normal people become rich and become millionaires?

I've made it no secret that I was brought up in a supportive and loving family. While my parents were not rich people, I never had to struggle, nor did I ever wonder where my next meal was coming from. And, I'll just come right out and say it: My upbringing was top-notch, and that has a lot to do with my ability to retire this early.

But other than my upbringing, I consider myself a normal person.

I never got good grades. In fact, I suffered from what the Fairfax County Public Schools system labeled a "learning disability" going through grade school.

I struggled with math. And, I always needed extra time to learn concepts when the rest of my classmates seemed to breeze through the material.

Though I'm the king of self-deprecating humor, I know that I'm not dumb. But, that doesn't mean I'm naturally gifted, either.

Frankly, I'm not.

How does a relatively average person like me, who made virtually every mistake in the book, still grow up to meet his financial goals by retiring at 35 and continuously flirt with that million dollar number?

Can anyone become a millionaire?

The answer is, yes! As mentioned, it takes a lot of time, attention, and prudency to get to where my wife and I are today from a financial standpoint. Sure there are things that could set you back from achieving an early retirement like health issues, a sudden turn in the economy, or other unforeseen obstacles. Though if you take the proper measures, you too can become a millionaire – and it’s not that hard.

Read next in the article for the ultimate guide to personal finance. You will learn what I call “rich habits” that will help you become wealthy so you can join the ranks of other rich people on this planet.

5 ways normal people get rich and become millionaires

Over the past several weeks, I've given this a great deal of thought. How did I manage to accumulate as much as I did and retire early without being what I'd consider a "smart cookie" or naturally gifted?

1: I had a positive upbringing

There is just no doubt that my upbringing in a loving and uplifting family made a huge difference in my life. Instead of struggling throughout my childhood, I got to be a kid instead.

I got to play outside in pick-up sports games. Have sleepovers. Get into trouble...all without much worry about what was going on at home.

We don’t represent your typical “rags to riches” story. Both of our parents, however, came from very modest backgrounds. My dad worked his way up through the military by earning two masters degrees and joining the private sector in the 90s. He’s one of the hardest workers I’ve ever met.

And, part of what my parents did was instill within me a work ethic that drove me forward from the very beginning. They taught me to fend for myself and to expect nothing. When things go wrong, it's because I didn't do enough to prevent it.

It was damn frustrating at the time, but my childhood prepared me for the realities of life. No trophies for coming in sixth place.

My upbringing did several things that I consider crucial:

• I got to focus on being a kid rather than home-life problems
• Going to college was never optional for me; it was expected
• No student loans to speak of; my dad didn't want me to start life in debt
• My first job, thanks to my dad, brought in $55,000 a year, which marks a relatively high starting salary on which to build throughout my career

2: I invested from the very beginning

One of the first things I did when I scored my first professional job was to open up a 401k and Roth IRA. Though I didn't max out my retirement contributions until the last two or three years of my career, I always contributed every month at least the matched amount, which was generally 4%.

That meant that by the time my wife and I decided to call it quits early, we had several hundred thousand dollars already saved from years of working in the technology sector, which pays extremely well.

My 401k had an amazing impact in my life:

• It started my retirement savings in my early 20's
• And, it got me comfortable with living on slightly less than I made
• By the end, it added several hundred thousand to our net worth

The earlier people invest and start their savings regimen, the faster they can build wealth and, eventually, become rich. Yup, it's the magic of compound interest.

Compound interest is better than gravity and the quickest way wealthy people get rich.

Luckily, I started early, and this again was due in large part to my upbringing. My dad stressed the importance of saving because he saw first-hand the influence that it can have.

3: I never let someone else manage my money

Although this doesn't necessarily mean that this never works, I always took an active role in my retirement and general investment picture.

Also, I lived by a few basic money principles:

• I never day-trade or attempt to time the market
• I never invest in individual companies
• I always choose diversified targeted retirement or life strategy funds

I always knew that I lacked a genuine love for math and money, and therefore, I didn't let other people make decisions about my money because there was no way for me to check their work.

In other words, I wouldn't know whether or not the advice I was given was at all useful or smart. I refused to blindly follow advice about something as important as money and my retirement.

Instead, I chose to invest in funds that were automatically diversified for me. I kept things as basic as possible.I don't like over complication.

4: I gave my money purpose

In my experience, this is the most critical element to how rich people become wealthy.

For so many years of my life, my money had no purpose. And, that's ultimately why I plopped down my first year's salary to buy a Corvette. And why I bought a house at the height of the real estate market – all in the span of about 10 years. And, why I was barely getting any richer, even earning a high-income, because I spent the majority of what I earned.

I had a problem – but it wasn’t a spending problem.

The root of the problem was my money had no purpose. No reason for sitting in my bank account. No earmark. It just sat there, available. Crisp and smelling like success. I wasn’t doing anything else with it.

Why not spend it? That’s what I thought rich people did.

Have you ever heard the phrase “We fill the space we have”? It means that if we buy larger homes, we tend to fill those spaces with stuff – whether we actually need that stuff or not. If we buy smaller homes, we fill it with less stuff. In other words, we don’t need most of the stuff we have.

In the same vein, we spend the money we have. If it’s there, we spend. It’s fun. Especially if it is not earmarked for something bigger and better.

…especially if it has no purpose.

Eventually, I found the purpose for my money. That purpose was quitting the rat race and retiring early. My wife and I were set and determined to make that happened, and almost instantly, that purpose curbed my spending habits.

We did things like:

• Stopped upgrading our damn cell phones
• Canceled cable television
• Sold cars that we didn't need
• Discussed every single purchase

Though a wholesale shift in your spending habits definitely isn't easy, it's also not exactly difficult. You, like other determined-to-be rich people, know what you have to do.

5: We stopped paying attention to advertising

You might be surprised at how much of our spending is based on the advertisements that we see and hear. We may not actively and consciously recognize the connection, but for most of us, it's there.

None of us are immune to ads!

Most of us know the effect those ads have. They tickle our buying bones. They convince us we need this or that. At the end of each year, companies pay big bucks to get new commercials in front of us to get us to spend those year-end bonuses and raises – sometimes before we even get them.

How did we reduce our attention to ads?

We stopped watching TV – Easier said than done, right? Yup, it can be. Though, my wife and I haven’t owned a TV in years (yup, seriously!). No television. Nada. Sorry, Sony. Or Panasonic.

But, that doesn’t mean we don’t watch any entertainment. We do, but we don’t use television to do it. Instead, we stream the large majority of the shows that we watch using services like YouTube, Netflix and Hulu. Okay, I get that some programs use clever product-placement to subliminally advertise straight from within programs and movies. To remove exposure to those things, we’ll need to stop watching entertainment altogether.

We almost never go to malls – I know, malls are super easy. Everything is just right there. Trust me, I get it. However, malls are also chalk-full of ads and imagery throughout the entire place that most of us can’t help ourselves but peak into different stores along the way.

Amazon.com is kinda the same way. It’s an online mall. Do you know how much money you've spent at Amazon? It could be a scary number.

Instead, try shopping at other stores that are outside of malls to reduce the temptation to duck into other stores…you know, just to “look around”. Make it tougher and more inconvenient for you to shop more. Also, consider shopping locally and supporting local merchants if you can. Those stores will always be independent and separated from larger commercial centers and malls, and you’ll probably get a higher quality product, too.

We've tried making our own stuff – This isn’t just about saving money. Making your own stuff can reduce your exposure to advertising because your mind is fixated on something entirely different. You’re thinking about the ingredients and process of making something rather than just buying it already made – probably from India or China.

Your innate skills have value. But, how many of us are using those skills to make things for ourselves? Some are, but most aren't.

We almost never buy new – I’ve become a huge believer in buying used products over new, especially with high depreciation items like cars and electronics. Not only are you saving money by letting someone else pay for the cost of depreciation, but you are also removing the temptation that we get whenever we’re in the market for brand-spanking-new stuff.

Looking for a camera? Buy used and save hundreds (or thousands) through eBay.com or – my personal favorite – keh.com. Cars? Definitely, buy used. New cars lose an incredible amount of value the second they are driven off the lot. Even clothes. Books. Computer equipment. Whenever possible, pick things up second-hand after depreciation has already taken its toll.

Live sensibly – Just cut down on the number of things you have. Seriously, it works. Before moving into our Airstream, my wife and I sold both of our homes and the vast majority of our possessions. As a result, we live a lifestyle that many would consider minimalist, but I don’t like that term.

Here's a challenge: Try cutting out television for an entire week. Instead, get your entertainment through mediums like YouTube or Netflix. While there are ads on YouTube, they are easy to dismiss. Focus on the content. And, you might be surprised that 30-minute television shows only have about 15 or 20 minutes of actual show. Nearly half of that time slot are ads!

What jobs can make you rich?

Sure, there are a ton of jobs out there that offer high salaries; however, a constant influx of a ton of money means nothing if you aren’t able to save any of it. For me, I was getting paid a decently high income from the get-go and I attribute my biggest obstacle to becoming rich to my spendthrift mentality. First it was the Corvette, and then it was the house. I had no true bearings on how to achieve financial solvency. So my advice to you is to look less at the job and more at your spending, saving, and investing habits in order to climb the totem pole of financial success.

What jobs do millionaires have?

I get asked this question all the time and much to most peoples’ surprise, many of today’s millionaires don’t have glamorous jobs. Of course you can strike gold working in finance or by doing something in law or the medical field; but many of the millionaires I have consulted throughout the years and in the midst of my own journey towards early retirement have confirmed that they follow many, if not all, the steps I have detailed above.

Millionaires makes it their job to save and spend in all the right ways. They pay no mind to flashy advertisements and resist the urge to keep up with the Joneses in an effort to maintain a meaningless semblance of material relevancy.

Frequently Asked Questions:

Can anyone become a millionaire?

Yes, becoming a millionaire is achievable for many people, not just through inheritances or winning the lottery but through diligent saving, investing wisely, and managing expenses. It requires time, attention, and financial prudence. Understanding and practicing "rich habits" can significantly increase your chances of accumulating wealth.

How does upbringing influence financial success?

A supportive and loving upbringing can significantly influence one's financial success. It provides a stable foundation, instills a strong work ethic, and often sets expectations for higher education and financial responsibility. This environment can lead to better preparedness for adulthood and financial planning.

Why is investing early important for financial growth?

Starting to invest early, such as opening a 401(k) and IRA, and consistently contributing to them, can leverage the power of compound interest, which Einstein reportedly called "the eighth wonder of the world." The earlier you start, the more your investments can grow, helping to build wealth over time even with average incomes.

How does giving your money a purpose help in wealth accumulation?

Money without a purpose often gets spent impulsively. Defining clear financial goals or purposes for your money, like early retirement, can dramatically shift spending habits towards saving and investing. It helps in focusing resources on what truly matters, significantly aiding in wealth accumulation.

What are some habits of self-made millionaires?

Self-made millionaires often share common habits, including living below their means, avoiding debt, saving and investing a significant portion of their income, and making calculated financial decisions. They prioritize financial independence over materialistic show-offs and are meticulous planners when it comes to their finances.