from https://finance.yahoo.com/personal-finance/banking/article/the-number-one-way-americans-are-becoming-millionaires-191057199.html

What's the number one way Americans are becoming millionaires​?
The answer might surprise you.

Yahoo Personal Finance · Getty Images
Sarah C. Brady
Sarah C. Brady · Contributor
Updated Tue, March 11, 2025 at 12:16 PM PDT 5 min read

Despite challenging economic conditions, the U.S. keeps producing more millionaires. The total number of U.S.-based millionaires more than
doubled from 2020 to 2023, reaching nearly 22 million individuals.

How have so many people reached this major financial milestone? It
wasn't through get-rich-quick trends like going all in on crypto or
launching an app. Most people are achieving the American dream by
prioritizing their retirement savings.


What exactly is a millionaire?
First, let's clear up what it means to be a millionaire. Sure, being a millionaire implies you've accumulated at least a million dollars, but
there's a little more nuance to it than that.

By definition, a millionaire is someone whose net worth is at least $1
million, meaning the total value of all their assets (cash, property, investments) minus their outstanding debt is $1 million or more. The
term is quite broad since it includes anyone with assets of at least $1
million but less than $1 billion.

Does being a millionaire mean you're set for life? Not necessarily. In
the past, being a millionaire meant you were rich, but the value of $1
million has dwindled over time due to inflation. For example, you'd need
over $1.6 million in 2025 to have the same spending power you did with
$1 million in 2005.

Being a millionaire doesn't exactly ensure happiness, either. According
to one study, happiness peaks when your salary reaches $100,000 per year.

Still, increasing your net worth can help you overcome financial
challenges, like depending on Social Security as your sole source of
income during retirement. It can also give you a greater sense of
autonomy over your own circumstances.

Read more: How much money is considered rich?

The number one way Americans are becoming millionaires
So what's the most surefire way to amass $1 million? Most people who
become millionaires in the U.S. reach this milestone in a very simple
way: by making automatic contributions to a retirement account from
every single paycheck over many years.

Surprised to hear that? This method certainly lacks the appeal of a get-rich-quick scheme, but here are a few reasons why consistent
retirement contributions work so well:

Underspending: Automatic contributions from each paycheck help you
prioritize saving money and teach you to live off less than your full
income.

Staying level-headed: Consistent investing helps you see the bigger
picture and reduces the temptation to make impulsive (and expensive)
moves based on headlines and trends.

Free money: Many retirement plans come with an employer match. In other
words, when you contribute, your employer puts free money into your account.

Risk-based adjustments: The majority of retirement plans automatically
adjust your portfolio based on your age and when you plan to retire,
also known as target-date investing.

Additional tips for growing your wealth to $1 million
Eliminate obstacles
It might sound counterintuitive, but there are certain financial goals
that should be prioritized over retirement savings.

If you're carrying high-interest debt (i.e., credit cards), pay them off
as soon as possible. When you do, you'll eliminate the high-interest
charges that eat up investment returns in your retirement account.

Then, put some money into emergency savings. This way, you won't be
tempted to make an expensive early withdrawal from your retirement
account when a financial emergency comes up.

Read more: How much money should I have in an emergency savings account?

Start now
The sooner you start contributing to your retirement account, the more
time your money has to grow.

If your employer offers a 401(k) or other retirement plan, enroll right
away and set up a recurring contribution from your paycheck, even if
it's a small amount — if you have access to an employer match, even
better, since this puts free money into your retirement savings.

If your employer doesn't sponsor a retirement plan, you can open a solo
401(k) and/or an IRA.

Read more: 401(k) vs. IRA: The differences and how to choose which is
right for you

If you want your retirement savings to be worth $1 million by the age of
65, here's roughly how much you need to contribute at each age (assuming
an 8% average return and not including plan fees):


Keep increasing your contribution
If you're hesitant about putting money into retirement, start small.
Then, aim to increase your contribution at least once a year. Here are a
few ways to make sure you can do that:

Income increases: Make it a goal to raise your income annually, whether
through a pay raise, a promotion, a side hustle, or by switching jobs. Continuing education can help too, since earning a degree strongly
correlates to income growth and net worth. However you go about
increasing your income, be sure to increase your retirement contribution instead of your spending.

Lower expenses: Whenever your expenses decrease, automatically roll the
extra cash into your retirement contribution. For example, if you have a
car loan with a payment of $250 per month, add that $250 to your monthly
401(k) contribution once the loan is paid off.

Ideally, you want to be able to contribute the maximum amount allowed
each year. For 2025, the maximum contribution for 401(k)s, 403(b)s, and
Thrift Savings Plans (TSPs) is $23,500 for people under 50 and $30,500
for people 50 and older.

Roll over old accounts
When you change jobs, don't forget to take your retirement savings with
you. Sure, you can leave your money in the account provided by your old employer, but there are major benefits to rolling it over into a new
401(k) or IRA, including:

You might have to pay higher fees on the old account after leaving the employer.

You can no longer contribute to the old plan.

You'll have fewer accounts to manage.

You can avoid any trouble accessing the old plan.

Buy property
Investing in retirement is the main way Americans are building wealth,
but it's not the only way. Another big driver for net worth growth is
owning a primary residence.

Buying and owning a home isn't cheap; you'll need to cover a down
payment, closing costs, property maintenance, and more. But it can pay
off in the long run.

If you don't have enough money to buy a home, look into first-time
homebuyer (FTHB) programs through your state or a local agency. As long
as you haven't owned your residence in the past three years, you could potentially qualify for FTHB assistance.

Read more: Saving to buy a house? Here's where you should park your down payment money


Read More
This week on Reddit: Comparing American Express vs. Wealthfront savings accounts
This week on Reddit: Comparing American Express vs. Wealthfront savings accounts
With interest rates on the decline, redditors want to know which
financial institution has the better option for their savings: American
Express or Wealthfront. Here’s our expert take.

How does inflation impact savings and CD rates?
How does inflation impact savings and CD rates?
Understanding the relationship between savings/CD rates and inflation
can help you maximize your interest earnings. Here’s how inflation
impacts savings account and CD rates.

--- SoupGate-Win32 v1.05
* Origin: fsxNet Usenet Gateway (21:1/5)