The American dream is synonymous with freedom of speech, freedom of choice, quality of life, and unlimited opportunity. A large part of that dream for most Americans is making a million dollars and having the status that goes along with it.
While a million dollars doesn’t quite go the distance that it did 20 or 30 years ago (thanks in part to inflation), it’s still commonly used as the benchmark for financial success in today’s society.
Chances are that you’ve day-dreamt about having a million dollars yourself. I know I have… on many occasions. If you have to, then I can assure you that you’re not alone. It’s actually very normal to think and dream big like this.
But let me ask you this: Did those (day)dreams go as far as showing you exactly how you ended up making that first million dollars of yours? If not, you might have some questions about some of the best ways you can actually make a million dollars in today’s economy.
Well, there’s some good news. There are actually several proven ways of making a million dollars. But don’t think for just one second that it’s easy, because it isn’t. Earning a million dollars is tough and usually boils down to hard work, planning, and luck, or a combination of all three.
Below are five proven ways to become a millionaire. After reading each one of these ways to become a millionaire, you’ll see that some of these are unlikely and out-of-your-control, but at least one can be considered a reliable and foolproof way to help you cement your financial future.
Ways to make a million dollars #1: Build your million dollar empire from the ground up
A lot of people automatically associate millionaires, or making a million dollars, with building and growing a profitable business. And for very good reasons – because it’s been done before and continues to happen all the time.
It’s actually not unlikely at all to think in this regard or consider starting your own business with the end goal of becoming a millionaire. We see it happening all the time, especially considering the low barriers to entry for just about any type of business. This is exactly why starting a side hustle has become a very favorable option for many.
Becoming a successful entrepreneur or business owner is the exact type of success story that the foundation of the American dream was built on. It’s a classic tale of success, which has become the reality of significantly more Americans in recent years.
With that being said, it’s even more important to keep your expectations straight by understanding that when you start a business or pave the way for your entrepreneurial journey, not everything will be sunshine and rainbows.
Be ready to plan carefully, work even harder, and roll with the punches whenever they come your way. Starting a business comes with a lot of sacrifices, which often includes your lifestyle and wealth, before even seeing any financial reward.
Before jumping in head-first, it’s important to ask yourself if you’re ready to take the risk of sacrificing your current lifestyle not just for a few months, but potentially a few years with the chance of not receiving anything (money or fame) on the other side of the tunnel.
To help put things into context and hopefully give you some more clarity, here are some numbers that we were able to find.
In the US alone, there are more than 627,000 new businesses started every year. This number fluctuates, but it’s also steadily increasing year after year.
Now, how many of these new businesses end up surviving beyond the first year of operating? Personally, I was very surprised by the numbers. According to multiple studies, roughly 80% of new businesses make it past the first year, but only 45-51% of those same new businesses end up surviving more than 5 years.
Sure, based on those numbers the odds don’t seem bad at all. Actually, the probability is rather high to some degree. But don’t let that fool you one bit because there’s something important missing from these numbers: the dollar amounts.
So, while you might be included in that group of 50% of businesses that make it beyond five years, don’t expect to be making a million dollars by then. Not even close.
As someone who’s been around many other entrepreneurs for quite some time now, I can confidently tell you that it’s very rare for businesses to become profitable (or cash-flow positive) within the first 5 years of operating. Furthermore, I’ve seen first-hand the salaries of these founders, on average, and it isn’t pretty by any means during those first few years.
Ways to make a million dollars #2: Get lucky and win big at the lottery
Talking about dreams, I’d be surprised if you have never once dreamed about winning big at the lottery. Again, I know I have.
While it’s certainly a nice thought to dream of, do you know how likely it is to actually win the lottery?
The short answer is that it’s not very likely. At all.
In the United States, the odds of winning either the Powerball or Mega Millions are roughly 1 in 292.2 million and 1 in 302.6 million, respectively. In other words, the odds are completely against you.
To put it into more perspective, the odds of winning the lottery are significantly worse than the probability of your death as a result of one of these also-very-unlikely scenarios:
- Plane crash: 11 million to one
- Car accident: 103 to one
- Falling out of bed: 2 million to one
- Bathtub drowning: 804,000 to one
- Flesh-eating bacteria: 1 million to one
- Lightning strike: 2 million to one
- Dog mauling: 700,000 to one
- Snakebite or bee sting: 100,000 to one
- Shark attack: 3.75 million to one
Now I’m certainly not here to tell you how you should be spending your money. It is yours after all, but what I can confidently tell you is that there are MUCH better ways to spend your money than on lottery tickets.
But then again, there are also people who spend $5 a day on lattes that have an absolutely 0.00% chance of winning anything, other than maybe another latte with a local rewards program. So if spending your money on the odd lottery ticket from time-to-time is a vice, then go ahead and enjoy it. Just don’t bank on that as your only way to make a living or for your retirement plan. Seriously, don’t. You are much more likely to lose a million dollars in the lottery than to win a million dollars.
Ways to million dollars #3: Becoming a professional athlete
Becoming a professional athlete is next up on our list of ways to earn a million dollars.
It’s common knowledge that professional athletes earn very large salaries, but just how much can they make? What are the average salaries of professional athletes in the NFL, NBA, MLB, and even the NHL?
Well, let’s take a look at the numbers in the table below. When you’re reading these numbers, keep in mind that this takes into consideration all players earning minimum salaries, as well as payouts of the highest-paid athletes in each league.
|League||Average Salary||Lowest Salary||Highest Salary|
|NBA (National Basketball Association)||$7.7 Million (2019 numbers)||$582,000||$40.2 Million (Stephen Curry)|
|NFL (National Football League)||$2.7 Million (2017 numbers)||$450,000 to $500,000||$70 Million (includes salary and bonuses)|
|MLB (Major League Baseball)||$4.36 Million (2019 numbers)||$563,500 (see reference)||$38.3 Million (Stephen Strasburg)|
|NHL (National Hockey League)||$4M (2018 numbers)||$650,000||$19 Million (Connor McDavid)|
You may have noticed that there was one notable figure not included in the table above: the odds of becoming a pro.
There’s a good reason for that – finding the accurate (and non-misleading) numbers for becoming a professional in each of the leagues is extremely difficult to calculate. The calculations are nuanced and have a lot of considerations that can either be interpreted or misinterpreted depending on the timeframe. For example, are we looking at the odds of all players in high school of making it pro to each one of those leagues? Or are we looking at those high-school players who move on to college (or the minors) and then end up getting drafted professionally?
Needless to say, the numbers vary considerably depending on what exactly you look at it. What I can say is that it’s extremely difficult to accurately calculate the odds of a 10-year old making it to the NBA who has just picked up a basketball for the first time.
However, based on some of the common figures I’ve seen, which looked at both highschool and college players, as those are easier to get an accurate count across states and the country, the odds across all professional leagues mentioned above range anywhere from 1 in 2,000 (0.05%) to 1 in 10,000 (0.01%).
So, while the odds of making it as a professional athlete trump any of the odds associated with winning the lottery, it’s still not something you should bank on to get you to the riches or fund your retirement.
Even if you do end up making it, there are other factors to consider such as longevity of your career, risk of injury, new talent and competition of roster spots, coaching influence, and more.
Definitely don’t give up the dream for you (or your children) of making it to the pros, rather set your expectations accordingly and plan for alternative outcomes.
Ways to make a million dollars #4: Inheriting a fortune
This one is quite different from the other methods of earning your first million dollars on this list.
The reality is that most people reading this will not even have a chance at “earning” (sure, let’s call it that) a million dollars this way because it directly relates to your family’s generational wealth and whether or not you have an inheritance waiting for you.
This one piqued my interest a little bit, so I decided to do some research on the wealthiest families in the United States.
Are you ready for these numbers?
You may have already known this, but the top three wealthiest families (the Waltons, the Kochs, and Mars families) have a collective worth of $290 Billion.
Yes, you read that correctly. $290 BILLION spread across 3 families alone. That’s more money than the GDP of more than 140 countries.
The top 25 wealthiest families in the United States have a collective wealth of more than $700 Billion, compared to the 87 wealthiest families in Canada with a combined net worth of $259 billion.
According to the Federal Reserve’s Survey of Consumer Finances, the average Net Worth of American households is $692,000. However, the median number at the 50th percentile represents a much more accurate number at just $97,500 considering the wealthiest households pull up the average significantly.
What are the important takeaways here? Generational wealth and estate planning is extremely important, you can’t choose your family, and it’s unlikely that you will inherit a million dollars. But then again, you can choose your friends. You could always make friends with an elderly millionaire and hope to get a piece of the pie.
Ways to make a million dollars #5: Building your financial plan and putting your money to work
Remember when I mentioned that one of the 5 ways of making a million dollars was more foolproof than the others?
Well, this is it.
Building a financial plan and sticking to it by putting your money to work for you is hands down one of the most certain ways for just about anyone to become a millionaire, fund their retirement (possibly even retire early), and rest easy knowing they’re on their way to financial success.
If you start early, save often, and invest your savings, it isn’t all that difficult to grow your nest egg to a million dollars or more. You can thank compound interest and leveraging the amount of years you have until retirement for that.
Don’t get me wrong, I’m not saying that it’s easy but if you stick to it, you will be able to retire with millionaire status. Just know that it will require a lot of time (easily 20-30 years to accumulate the wealth), patience (the same amount of time), dedication, effort, discipline, and of course proper planning.
Are you ready to work towards your first million?
After reading this article, you (hopefully) now agree with me that while there are many proven ways of making a million dollars, there is one method that sticks out above the rest as being the proven way to achieve financial success: Building a financial plan and sticking to it.
So if I was in your chair and reading this article, here’s what I’d do: I’d start by creating my free financial plan with Savology right now. Why now? Because it only takes five minutes and it’s completely free.
Sounds good, right? Well, what’s even better is that your plan is completely personalized based on your financial goals and your desired retirement outlook, meaning it will show you the exact next steps you need to be taking to make sure that you’re reaching those goals and setting yourself up for financial success. And the best part of all of it all is that it works.
Here’s to a million dollars and financial success. It’s a lot easier when you have the help, recommendations, and motivation you deserve.
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