Most personal finance experts recommend saving at least 10 percent of your income. That’s good advice and a surefire way to help you on your road to retirement. But what would happen if you saved 50 percent?

The median household income in the U.S. for 2017 was \$61,372, according to the U.S. Census Bureau’s annual survey. While your take-home income after taxes will vary from state to state, averaging the take-home salary of the United States’ 10 most populous metropolitan areas shows the mean American post-tax household salary is \$46,738.40. In an average household, 50 percent of your take-home income would equal \$23,369 per year.

## Doing the Math

Let’s assume that you begin investing or saving half your paycheck at age 25. You keep investing the exact same amount until you retire, at age 65.

In the historically likely — though not guaranteed — scenario of your rate of return being 8 percent by investing in the stock market, how much will you be worth by investing 50 percent of your income every year? \$6,538,247. Congratulations — you’re a multimillionaire.

## How to Become a Millionaire From Nothing: From Theory to Reality

Now that I’ve got you motivated, let’s demonstrate how a person can actually save 50 percent of his or her income in order to realize this kind of wealth. While it might sound impossible at first, I currently save more than 50 percent of my income every month, and I’ve developed strategies and habits to make it easy.

### Cutting Costs

The first step is to get your fixed expenses as low as possible. Reconsider everything.

Are you getting the lowest rate on your car, health insurance, and rent? Do you really need both Netflix and Hulu Plus?

Also consider frugal options before purchasing new home goods. Is shopping at Walmart or Target that bad? I shop at Walmart most of the time, but I do it early in the morning. Turns out, Walmart isn’t too unpleasant when there aren’t crowds — plus it’s incredibly budget-savvy.

Finally, cut out unnecessary spending. This includes things like ordering takeout on a whim, or buying nonessential items on Amazon. Reconsider expensive vacations to exotic locales, and opt for something closer to home, or even a stay-cation. Making sacrifices in the present, while continuously investing, will net incredible returns by the time you retire.

While this advice isn’t new, minimizing spending is a core component to lasting financial gains.

“Spend like you’re still in college, earn like you’re a professional, and maximize the difference,” says Rob Stromberg, a certified financial planner at Mountain River Financial. “I stress to clients that spending more isn’t necessarily going to make them happier, but it will definitely hurt them on their quest to build wealth.”

“My recommendation is to try to find a roommate to defray the cost of housing and think about holding on to their existing car or even selling it if they live in a big city to cut down on transportation costs,” Stromberg continues. Not taking super extravagant trips when they want to travel is also a maxim of his.

After taking these steps, what’s your savings rate? If you have a decent income, it should now be at least 50 percent. If you’re still having a hard time saving that much — even after you’ve cut your fixed costs and frivolous expenses — it’s time to earn more.

### When Hustling, Don’t Undervalue Your Skills

It’s easy to devalue your own professional skill set, especially if it’s early in your career. For example, you may think graphic design is easy. With that mindset, you’ll inevitably ask a low price.

But you should realize there are many people out there who find your skills extremely valuable. Charge appropriately.

“The other component to building wealth is to relentlessly focus on trying to advance your career to maximize income potential,” Stromberg says.

“If career advancement is not an option in your current job, focus on creating a new income from some sort of side hustle.”

Of course, if you have the resources, expanding your professional skill set early in your career can net huge financial rewards by the time you retire.

“Consider investing in yourself first,” CPA and CFP Erin Donahue says. “An investment in your education, be it a certification, credential, license, or advanced degree, has the potential to increase your base salary and may pay you back over and over again in the future. Few investments can offer that kind of return.”

### Lucrative Careers

Looking for a career change? Thinking about “following the money” to a more lucrative sector? These industries are producing the wealthiest people worldwide, according to Forbes Magazine’s annual list of high net worth individuals:

• Financial Services
• Tech
• Food and Beverage
• Manufacturing
• Health Care
• Energy
• Fashion and Retail Goods
• Diversified (multiple income streams)
• Real Estate

### Start Saving and Investing

Once you begin earning more, save half automatically. This way you never get used to an inflated lifestyle. Cut down expenses. Make it a habit. After all, habits are hard to break.

“To the 25-year-old just starting out saving, I feel the most important step is creating good habits,” says Laura Morganelli of Abacus Wealth Partners.

“It can feel daunting to start saving in your 20s, especially when it feels like there is so little leftover. It is important to start saving, no matter how small that amount may be.”

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