Becoming a millionaire seems so difficult that many have concluded that only the lucky achieve it.
However, 79% of American millionaires did not receive any inheritance from their parents or family members, according to a national study of millionaires conducted by Ramsey Solutions, a financial advisory firm.
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More importantly, 75% of the 10,000 millionaires surveyed said regular, consistent investing helped them build wealth.
But isn’t this only a luxury for high earners? No. Only 15% of millionaires were in senior leadership roles, and 93% said they became wealthy because they worked hard, not because of high salaries.
In other words, if they can do it, you can. But how do you do it?
It’s to that question that we turn.
— Set the right personal finance foundation.
— Commit to investing a percentage of your income every month.
— Make maximum use of tax-advantaged accounts.
— Explore other investment accounts.
— Automate your investment accounts.
— Stay invested.
— How consistent investing leads to wealth.
Set the Right Personal Finance Foundation
Investing success can only be built on the right personal finance foundations.
A big aspect of this is budgeting. Whichever budgeting system you use, ensure that you are spending less than you earn. It’s this gap between your monthly income and monthly expenses that will be the engine of your wealth.
Also, if you have bad debt — think credit card debt, auto loans, payday loans and consumer debt — you should create a system to pay it off.
The debt snowballing method is a popular one. It involves using your extra income to quickly pay off your bad debts, starting with the smallest ones and moving on to the bigger ones.
A third aspect of this right foundation is having an emergency fund. This is an account that holds up to six months’ worth of your monthly living expenses (needs plus wants). It is the go-to account when emergencies such as unexpected hospital bills, car breakdowns, unplanned travel and sudden job loss arise.
By using funds you have saved, you will avoid getting into bad debt.
If you are just starting on your personal finance journey, putting this foundation in place is your first duty. With this strong foundation, you can begin to build wealth through investing.
Commit to Investing a Percentage of Your Income Every Month
As said above, you should budget your monthly expenses to be less than your monthly income. The excess should be for your short-term (saving) and long-term (investing) financial goals.
Here, we are concerned about the portion dedicated to your long-term goals. This is the one you will be investing in the financial markets. And since it stays in the markets for the long term, it is the portion that helps build wealth by benefiting from the miracle of compounding.
Using a percentage instead of a fixed amount ensures that your investment grows in tandem with your income.
There is no perfect figure to use. Many financial advisors like the 50/30/20 rule, which will have you spend 50% on needs, 30% on wants and 20% on saving, investing and paying off debt.
That’s a nice guideline, but the most important thing is having a number that you can stick to consistently every month.
Make Maximum Use of Tax-advantaged Accounts
The study of millionaires referenced above shows that 80% of U.S. millionaires invested in their company’s 401(k).
Thus, tax-advantaged accounts provided by your employer are a good place to start.
If your employer matches your contribution, then you should contribute as much as you need to maximize the employer match (often 6% of your income). You can choose to contribute more, up to an annual limit of $24,500.
In addition, you can open an individual retirement account, or IRA, to supplement your contribution to employer-sponsored plans. This can also be an alternative to maxing out your contribution to employer-sponsored plans.
IRAs provide more flexibility as you can choose your provider and investments. The administrative burden is also less stringent, which means lower fees.
You can choose between a traditional and a Roth IRA. The former is better if you expect to be in a lower tax bracket in the future, while the latter is appropriate if you expect to be in a higher tax bracket.
In 2026, both traditional and Roth IRAs have annual contribution limits of $7,500, or $8,600 for individuals 50 and over.
You can also enjoy some tax benefits if you invest in health savings accounts. These are tax-advantaged accounts you can use to save for medical expenses. They are available only to people enrolled in a high-deductible health plan and can be used to pay for qualified medical expenses.
[Read: 8 High-Return, Low-Risk Investments for Retirement]
Explore Other Investment Accounts
If you have more funds to invest after maxing out the tax-advantaged accounts, you can also consider non-tax-advantaged accounts like regular brokerage accounts.
These investment accounts have neither contribution limits nor required minimum distributions, and they allow you to withdraw your money anytime. Also, you can invest in many asset classes and more flexibly apply strategies like tax-loss harvesting.
Automate Your Investment Accounts
Knowing how to spread your monthly investment capital across these different investment accounts can be a bit tricky.
This is where your financial advisor can help. They can use their knowledge of your financial situation, time horizon, risk tolerance and investment goals to help you choose the most appropriate account(s) and the best way to allocate funds.
Once you have decided on the accounts and the allocation formula, it’s time to automate your investment into the relevant accounts.
Automation is a good way to heed the advice of Warren Buffett: Don’t save what is left after you spend; spend what is left after you save.
Setting automatic debits on your payday can be a nice way to overcome the temptation to overspend. It ensures that you are sticking to your budget instead of being lured by items that are not emergencies.
Stay Invested
Many people rush out of the market during a downturn or bearish momentum.
Some more sophisticated investors also try to time the market — buying the dip and exiting when the market tops.
However, research has shown that time spent in the market is more important than timing the market. Said differently, staying in the market is more important than timing it.
The dip can go further, and what a market timer calls a market top might just be the early days of a massive bullish run. In other words, the market timer can miss out on the market’s best days while staying invested on its worst days.
Consider a hypothetical investment of $10,000 in stocks over 20 years, as analyzed by BlackRock. The investor who stayed invested over the entire period would have made 58% more than the market timer who missed just the five best-performing days. If we extend it to 25 of the best-performing days, the investor who stayed invested would have made 75% more.
Research has also shown that the stock market rises more than it falls. As BlackRock noted, the U.S. stock market has never had negative returns on a rolling 20-year basis between 1936 and 2025. Also, since 1972, it has never had negative returns on any rolling timeframe longer than 12 years.
In other words, you have more to gain by staying invested in the market than attempting to time it.
How Consistent Investing Leads to Wealth
To conclude, let’s consider a simplistic example of how consistent investing can build wealth.
Suppose you invest an average of $2,083 every month across all your investment accounts.
Let’s also assume you are starting from scratch and that your average return across these accounts matches the average return of the S&P 500 over the past 50 years: 11.8%, according to OfficialData.org.
If you compound quarterly, you will be a millionaire after 15 years.
What if you want to achieve this status in just 10 years? You will need to invest $4,472 at the end of every month. If you are more aggressive, you can get there in five years by investing $12,469 every month.
While this is a simplistic example, it illustrates that you can also join the league of self-made millionaires in the U.S. if you can build the discipline necessary to invest consistently and give your money time to grow.
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How to Become a Millionaire by Investing originally appeared on usnews.com
Update 05/14/26: This story was published at an earlier date and has been updated with new information.