Teens Can Become Millionaires

Yes! Teens CAN become millionaires. Some will tell you that it’s too difficult.

“The things we buy are too expensive.”

“It’s too hard to find a good paying job.”

“School is so expensive.”

You know what? Those things could be true. But you know what? I KNOW it’s STILL possible. I’ve heard story after story of young people making great financial decisions and achieving big things. The path to millionairedom for a teen follows the same principles as for adults.

1. Live on less than you make

2. Have an emergency fund

3. Pay cash for big purchases

4. Don’t use debt or chase credit scores

5. Save

It’s that last part that I want to focus on. It’s really important that you get the other four right, but this last one, Save, is where you start to build wealth like crazy. Do you know what saving $25/wk. will do? Get ready for your mind to be blown.

Before we get into that, though, I want to stress something. Wealth is not meant just for yourself. You are blessed with wealth so that you can be a blessing. So, make regular generosity part of your wealth-building journey. Besides that, wealth-building is a long road, and if you aren’t focused on a vision or something bigger than yourself, it’s easy to lose sight of where you are headed. It might be challenging but take some time to think about why you want to become a millionaire. Write it down. That way, when you lose focus, or you’re tempted to go off course, you can take out your vision compass and re-orient yourself.

The secret lock to becoming a millionaire is simple—compound growth. This is the idea that your money makes more money, and then you get more money added on top of that money, all without doing anything. You put money in and leave it alone. You watch and wait, or better yet, don’t watch. (Because watching can tempt you to do something other than watch.)

The key to the secret lock is time (a.k.a. STARTING EARLY) and letting compound growth do the rest. Let’s say you save and invest $100/mo. starting at age 17 and do that consistently for ten years. At the end of that time, you would have saved $12,000, and you’d be 27 years old. With compound growth, your savings will have grown to a little over $20,000 at the end of those ten years. Not bad. Now, you stop saving and let compound growth take over exclusively until you retire at age 67. At the end of that time, you have a whopping $1,100,002! (Yes, I’m exacting) Think about what would have happened if you had put away a measly $200/mo. instead!

Contrast that with a friend of yours who didn’t follow your example and started saving the year you stopped. They contributed $100/mo. from age 27 all the way to age 67 then they retire with you. (No, not with you, like in the same house.) At the end of that forty years, that friend will have contributed $48,000, and their account will have grown to $632,405. Wait, is that a typo? Hold on. How could that be right? Yeah, that friend will have less. Much less. That’s the power of compound growth. The one who started later, saved longer, and saved more had less than the one (You) who was on their game EARLY.

How can you argue with these numbers? If I could go back in time, I would tell my younger self to find a way, anyway I could, to put away $100/mo. The reality is that as you work longer, you’ll be able to put away even more than $100/mo., and you’ll be able to do it for decades. There’s a high probability you will be a multi-millionaire by the time you reach 67. So, get after it. Find a way. Pick up another shift. Get a small side hustle. You can absolutely chart your financial course and change the trajectory of your progeny. (I like $1 million words) Don’t forget to follow the principles I shared earlier: Live on less than you make, Have an emergency fund, Pay cash for big purchases, Don’t use debt or chase credit scores, and Save. Those are the gateway to wealth-building superpowers!