How to Build Wealth – $1,000,000 – with Automatic Investing (Part 1)

Oct 11

For many, accumulating a $1,000,000 net worth may seem like a daunting goal—especially when thinking about saving that much all at once. The key to success in wealth-building is breaking down that big number into smaller, more manageable steps.

As the famous saying goes, "How do you eat an elephant? One bite at a time."

This approach works wonders for long-term wealth planning and building wealth. But there’s more to it than just breaking down a big goal. The real secret to success is setting up a foolproof system for automatic investing.

What Is Automatic Investing?

Automatic investing enables you to build long-term wealth over time with minimal effort. It’s about setting up systems that let your money work for you—even while you sleep. With passive income investing, you can steadily accumulate wealth day in, day out, without constant intervention. Automatic investments are a key part of any solid wealth-building strategy.

Here’s your millionaire roadmap to accumulating $1,000,000 with automatic investing:

Step 1: Define Your Financial Goal – How Much Wealth You Want to Accumulate

First, clarify your ultimate financial goal.

In this example, we’re targeting a $1,000,000 net worth. Writing down your goal makes it tangible and helps you focus on achieving it. Visualize your future financial success, whether that’s financial independence or enjoying the retirement you’ve always dreamed of.

Step 2: Set a Deadline for Your Financial Goal

Determine when you want to reach your $1,000,000 net worth goal.

If you’re just starting out, perhaps fresh out of college, you might set a goal to retire with $1,000,000 by the time you’re 65. Let’s assume you’re giving yourself 30 years to reach that milestone.

With automatic investing and consistent, regular contributions, you have plenty of time to make your system work for you—just don’t waste a minute!

Step 3: Break Down Your Goal into Smaller Steps

Next, break down your wealth-building goal into monthly or even weekly contributions.

To reach a $1,000,000 net worth in 30 years, you’ll need to save about $2,777.78 per month. That totals $33,333.33 annually, which may seem high.

BUT this savings amount assumes that you will not earn any interest on your investments. That doesn’t make sense!

However, we’ll adjust for investment returns and compound interest in the next step.

Step 4: Leverage Compound Interest

Now, let’s factor in compound returns. With a 5% annual return on your investments and reinvesting the earnings, your required monthly investment drops to around $1,201.55. This calculation shows how compound interest can significantly boost your wealth-building efforts. For beginners, this is a key concept when it comes to investing for financial freedom.

To learn more about compound returns – earning interest on interest visit Budget and Grow Rich® – click here.

Investing in tax-advantaged accounts like a 401(k), 403(b), or IRA can further speed up your journey. Employer matching contributions and tax benefits can give your investment portfolio a major boost. Understanding your employer’s plan is crucial to optimizing your wealth-building strategy.

Step 5: Set Up Automatic Investing ASAP

Now it’s time to put your savings and investing on autopilot.

Automatic investing simplifies the process, ensuring you’re regularly contributing toward your financial goals. Here’s how to set it up:

Automatic payroll deductions: Direct a portion of your paycheck into your retirement account or investment portfolio.
Automatic transfers: Schedule regular transfers from your checking account to your brokerage account or mutual fund.

By automating your investments, you save and build wealth consistently, regardless of market conditions. This approach leverages dollar-cost averaging, allowing you to buy investments at various prices and minimize emotional decision-making.

You’ll save money and build wealth every month, like clockwork. Rain or shine.

Step 6: Increase Your Investments as Your Income Grows

As your income increases, don’t expand your lifestyle. Instead, increase your automatic investments. This strategy allows you to accelerate your progress toward financial independence, moving you even closer to your $1,000,000 net worth goal.

Step 7: Monitor and Rebalance Your Portfolio

While your automatic investing system works in the background, it’s important to monitor your investment portfolio every three to six months. This ensures your investments remain aligned with your goals. Rebalancing may involve adjusting your asset allocation between stocks, bonds, and other investments.

Step 8: Watch Your Wealth Grow!

As your investments compound over time through automatic investing and compound returns, you’ll see your wealth grow steadily.

Celebrate your progress, but stay disciplined.

Remember, the key to building wealth is long-term consistency and avoiding the temptation to spend your savings prematurely. Keep your eyes on the prize—financial independence.

As they said in the popular TV show Mission Impossible, “Your mission, if you decide to accept it” is to create an automatic savings program and automatic investment program now and build wealth!

Start your journey toward a $1,000,000 net worth. Set up your system now, put your money to work for You and watch your wealth grow! With the right wealth-building strategy, you’ll be amazed at how much you can achieve.

Let us know how it goes.

See you next week,

Arthur V.

P.S. To Save More Money and Create More Free Cash, click here.

Disclaimer: OH and Please Remember, we are Not financial advisors, financial planners, attorneys or accountants and are Not providing any specific financial, tax or legal advice here. Be sure to conduct your own due diligence and consult your own professional advisors to get sound professional advice that’s specific to your financial and personal circumstances, risk tolerance, time horizon and investment goals and objectives among other key factors!