5 Strategies to Millionaire Status

1. Maximize your 401(k). An employer match is free money.

2. Start early and compound your returns.

• You will have $148,250 by age 60 if you invest $100 per month beginning at age 20. If you wait until you are 30, you will need to invest $182 per month or $365 per month if you begin at age 40.

• Protect against risk. A 2% higher rate of return may not be worth the potential loss.
• Health Costs ($200,000 - $500,000)
• An insurance policy ($2500 deductible, 20% copay and out-of-pocket limit of $6,500) would cost about $200 a month.
• If you suffered a $250,000 health bill, would only have paid $54,300 (2 years of insurance premiums, the deductible and the copayment) instead of the full $250,000 medical costs.
• If you saved $200 monthly into a 5% investment for two years, you could apply that $5052, but would still need to pay $244,950.

3. Set specific financial goals per decade.

4. Develop career skills.
   • How many times people will change jobs? The average person holds 10.5 jobs from age 18 to age 40, according to the Bureau of Labor Statistics.
   • For women, consider delaying a child.
     • Amalia Miller, in a paper "The Effects of Motherhood Timing on Career Path," finds that a woman in her 20s will increase her lifetime earnings by 10% if she delays the birth of her child by a year. This is because she will earn 3% higher wages for the rest of her life as well as work more hours. Professional women will earn 4.7% higher wages for the rest of their lives. There are two effects from having a child- an immediate effect (drop in wage) and a secondary effect of slower wage growth.