I'm Donny. I'm a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.
Who wants to be a millionaire? You do, and I can take you through eight excellent ways you can make one million dollars!
Here are 8 ways to make one million dollars:
- Invest in the stock market.
- Invest in real estate.
- Eliminate your debt.
- Spend less and save more.
- Freelance for a second income.
- Write a Kindle hit.
- Start an e-commerce dropshipping business.
- Scale a rental business.
Keep reading to get an in-depth explanation of how each of these strategies can bring you closer to that coveted million-dollar mark.
1. Invest in the stock market
Safe long-term investments in the stock market are as close to a guaranteed million dollars as you can get. By using a combination of dollar-cost averaging, compound interest, and the S&P 500 index, you can realistically make one million dollars in about 20 years.
All you need to do is invest $1,000 in the S&P 500 every month for 23 years, and by the end of this time frame, you should’ve made a cool million in compound interest alone.
Compound interest allows you to accumulate a return on not only the initial principal, but its subsequent interests as well. Say you have $100 invested and get a 10% annual return.
The first year you will earn $10 in interest. After the first year, compound interest starts to take effect, and you'll earn $11 in interest. In your second year, the additional $1 of interest comes from the interest earned off your $10 of interest in your first year of investing.
As time goes on, the effect of compound interest is amplified exponentially. Allow me to explain in real-world numbers: According to Investopedia, the average return of the S&P 500 is about 10.5%.
Using a compound interest calculator and our $1,000 a month investment goal, we can compare dollars invested to interest earned.
After the first two years of investing, you’ll have invested $24,000, and the $24,000 you've invested will have earned you $1,260 in interest.
As time goes on, the amount earned from interest will grow. For example, after ten years, you’ll have invested $120,000 and earned $75,895.95 in interest.
Now you can start to see compound interest taking effect. As we go even further to 23 years of investing, you will have invested $276,000. By investing about a quarter-million dollars, you will have $1,021,573.07 total or 745,573.07 in profit from interest.
About triple the amount you've invested. One final note on investing in the market is to take advantage of employer matching. Some employers will match contributions you make towards specific investment accounts.
You should always prioritize investing into accounts with employer matching because it's essentially free money! You can see how compound interest grows your wealth exponentially over time.
Therefore, you should start investing in the S&P 500 now! The longer you wait, the longer it will take to make that one million dollars.
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2. Invest in real estate
Investing in real estate is another excellent way to make one million dollars. Real estate investing is a great choice because real estate investments snowball quickly.
Here’s how to make one million dollars investing in real estate:
- Save for a down payment. Unfortunately, real estate investing can take a larger amount of up-front capital. Therefore, you have to save up for a down payment before jumping into the real estate game.
- Find an affordable starting property. As a new real estate investor, you can't jump right into purchasing a massive apartment complex in Manhattan. Instead, look for a small property in your local area. Townhouses and condos make for excellent starter properties.
- Get your mortgage. Applying for your first mortgage is tough, so I recommend doing further research. Investopedia's article on getting pre-approved for a mortgage is a great starting point.
- Generate cash flow. Generating cash flow is an important part of real estate investing. Typically, people generate cash flow by renting out their property. Your capital generated from however you choose to generate cash flow should cover all your property expenses (mortgage, utilities, taxes, etc.) and leave you with a profit margin.
- Leverage your property to scale. The best part of real estate investing is that once you're in, you're in. Now that you have a stake in the real estate market, you can leverage against your first property to get a loan on a second.
Continuing to scale into a real estate empire has the potential to earn far more than one million dollars in rental income alone. When you factor in the property value of your rentals, you'll realize how achievable one million dollars is in real estate investing.
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3. Eliminate your debt
You aren't a millionaire if you have one million dollars in cash but $900,000 in debt. Therefore, you need to be smart about eliminating debt to reach your one million dollar goal.
Here’s the smartest way to eliminate your debt:
- Sort your debt by interest rate. When you're working your way out of debt, the first step is to eliminate high-interest debt, like credit cards. Write out your different forms of debt, and sort them by interest rate.
- Set a budget. You need to decide how much of your debt you can afford to pay every month. I recommend checking out Bank of America's article on creating a budget.
- Start paying off your debt. Now that you've budgeted an amount to pay every month, you can begin paying off your debt. Start by paying your highest interest debt and working down the list.
Once you've put the above steps into action, it's just a waiting game. As you continue to pay monthly, your debt will diminish, bringing you closer to a $0 net worth, which is the first step to a one million dollar net worth.
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4. Spend less and save more
The path to increasing your net worth doesn't have to mean earning more money. Rather, you can spend less money and, in turn, save more, bringing you closer to one million dollars.
I encourage you to audit your spending habits and check for potential improvements that might allow you to save more. I'll help you to get started by listing a few different ways you can cut your monthly expenses:
- Move somewhere cheaper. If you live in a large metropolitan area, you may want to consider moving. The average rent for an apartment in New York City is $4,420 a month. Compared to $3,153 in Jersey City, you can save over $1,000 per month by moving. If you're willing to move countries, the savings can be even greater.
- Cook for yourself. Eating out is bad for your health and your wallet. According to Forbes, ordering out is nearly five times as expensive as cooking for yourself.
- Swap monthly subscriptions. Monthly subscriptions are the gift that keeps taking, but they don't have to. You can reduce the amount you spend on monthly subscriptions by trading subscriptions. If you have an Amazon Prime subscription, try finding a friend who will swap Netflix passwords so you can get two subscriptions for the price of one.
Cutting down your monthly spending, can be just as valuable as increasing your monthly earnings. Moreover, reducing your spending doesn't take up any time, unlike additional jobs and promotions.
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5. Write a kindle hit
Investing isn't your thing? No worries; if you’re a creative type, there are some strategies that might help you make a million dollars as well.
However, these methods are not as fool-proof as the ones I just mentioned. Your first creative option to earn one million dollars is to write a Kindle hit.
Amazon launched self-publishing for Kindle in November 2007, allowing any writer to publish their novel for sale on the Kindle platform.
Mill City Press' article on e-book pricing cites $3.99 as the most popular price for a Kindle book. We can pair our knowledge of popular e-book prices with The Atlantic's claim of Kindle authors earning a 70% commission to calculate how many books you need to sell to make one million dollars.
I punched 70% of $3.99 in my calculator to find Kindle authors earn about $2.79 per sale. Now you can divide $2.79 by one million to find that you need to sell 358,423 Kindle novels to earn one million dollars.
On top of Kindle self-publishing, you can also take advantage of Kindle Direct Publishing's print-on-demand to expand into the paperback market.
358,423 Kindle books are a lot to sell, but it's not impossible. If you hate waiting around for compound interest to work its magic, writing a Kindle book is a viable strategy to make one million dollars.
Plus, if you're not the creative type, you can sell blank books!
6. Freelance for a second income
Another way to put your creative skills to use is freelancing for a second income. By using websites like Fiverr and Upwork, you can sell your creative skills to companies and get paid for it!
Here are 10 skills you can sell as a freelancer:
- Content writing
- Graphic design
- Video editing
- Website development
- Off-page SEO optimization
- Social media management
- Email campaign coordination
- Data entry
The ten freelancing skills I listed above are just scratching the surface of what is possible. Think of the skills you have that potential clients are looking for.
Almost everyone has some skill they could sell as a freelancer. A bonus tip is to stack your remote freelancing work with an in-person job.
If you can land a quiet in-person job like overnight reception at a hotel, you can potentially get paid hourly while also earning money per freelance project.
Stacking two jobs using the above method can significantly increase your hourly wage, which will expedite the speed you can earn one million dollars.
7. Start an eCommerce dropshipping business
Ecommerce dropshipping businesses are a fantastic way to make automated income streams online. It doesn't take much research to find someone who made over one million dollars from dropshipping.
Dropshipping is when you sell a product without ever touching it. The manufacturer of the product sends it directly to your customer.
Your role in a dropshipping operation is to create and advertise a product. Thankfully, starting a dropshipping e-commerce business gets easier every year.
This means there has never been a better time to get into dropshipping than now! Suppose you're looking to automate an e-commerce dropshipping business, I recommend picking up The 4-Hour Workweek (available on Amazon).
The 4-Hour Workweek is the original resource for starting an e-commerce dropshipping business and is still the best resource to learn the fundamentals of automating cash flow.
8. Scale a rental business
I like rental business models because you only have to buy your supply once, and you get to sell it repeatedly. Scaling a rental business is similar to scaling a real estate investment venture.
However, I prefer starting a rental business because it usually requires a smaller up-front capital. To start a rental business, you need one product that people want but don't want to own.
Here are a few examples of good rental products:
- Tools. Tools like chainsaws, pressure washers, and carpet cleaners make for good rental products because people need these tools infrequently. People are more likely to rent a chainsaw for a day than purchase one because they don't want to pay full price for a tool they only use once a year.
- RVs. RVs are on the more expensive end of rental products and on the more profitable side. According to RVnGO, a Class A RV can earn between $15,000 and $30,000 per year.
- Hot Tubs. Hot tubs are a rental idea you probably haven't thought of, but they fit the bill for an excellent rental item. People love hot tubs but don't necessarily love the maintenance of one. Check out Side Hustle Nation's podcast on hot tub rentals for more info.
Use this short list of rental business ideas to fuel your creative fire! There are hundreds of potential products you could rent to eventually earn one million dollars, so let your imagination run wild.
Not that I've provided you with a few realistic ways for making your first million dollars, now is the time for you to pick one and get started on your journey.
The key to becoming a millionaire is all about staying focus on one project at a time and being very persistence and never giving up.
So what are you waiting for, get started on journey today to making your first million.