Money Magazine: How to Become a Millionaire

Sunday, 04 Aug 2013 02:48 PM

By Michael Kling

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Money Magazine offers these five guidelines for would-be millionaires.

• Focus on consumers in emerging markets. That will be the next big long-term demographic trend presenting huge opportunities. An Ernst & Young study the magazine cites predicts the number of Asian consumers capable of spending $10 to $100 a day will more than triple from 525 million in 2009 to 1.7 billion in 2020.

Editor's Note: Use This Single Loophole to Pay Zero Taxes in 2013

• Rent out a house, specifically a duplex or triplex. Depending on the market, they might not cost more than a single-family home, but offer more rental income. For example, a duplex and a single-family home in Minneapolis may both cost about $200,000, but the duplex will generate a total of $2,200 in monthly rent, about 80 percent more than one rental, real estate agent Jason Reed told the magazine.

• Advance your career with more education. But if you are in or mid-50s or older, an MBA or another bachelor's degree probably isn't worth the expense. Instead, a certificate may be more cost effective. A Georgetown University study found that certificates increase pay of workers with associate's degrees by 6 percent on average and workers with bachelor's degree by 3 percent.

• Improve how you look. Attractive people earn 13 percent more on average than those with below-average looks, the magazine reports, quoting University of Texas economist Daniel Hamermesh. That adds up to a cumulative $240,000 for a $40,000 salary. A few new suits and a new haircut may be all that's needed.

• Don't pay too much for a house. With dearth of homes for sale, homebuyers are entering bidding wars, but more homes will be coming onto the market. Jason Flurry, a certified financial planner and president of Legacy Partners Financial Group, told BankRate that living within your means is the best way to become a millionaire.

Opt for saving instead of getting more stuff, he advises. "Spend less than you make, live a modest lifestyle and don't live up to every raise. Some people have spent their prosperity for the next 10 years and they've done it on credit." Others remain thrifty despite their wealth. "They've been savers all their lives and the thought of spending $5,000 or $10,000 on a vacation is ridiculous. It doesn't matter that they're worth $3 million," he told BankRate. "They're really the last Depression generation, and it's burned in their memory that they need to squirrel away money."

Editor's Note: Use This Single Loophole to Pay Zero Taxes in 2013

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