12 Reasons You Won’t Be A Millionaire

James Britton CFP, CLU, EPC profile photo

James Britton CFP, CLU, EPC

Financial Planner
Britton Wealth Management and Planning Consultants Inc.
Fax : 866-202-2935

Becoming a millionaire likely won't mean a life of flying on private jets, yachting around the Mediterranean, and living in a sprawling Beverly Hills estate. Today's reality is that those making an average income (or more) will likely need to become millionaires to fund a happy and secure retirement. Keep reading for the 12 reasons you won't ever become a millionaire.


Serena Williams and Daniela Hantuchova of the Singapore Slammers on a private jet from Manila to Singapore prior to the Coca-Cola International Premier Tennis League at the Singapore Sports Hub on December 1, 2014 in Singapore. (Photo by Clive Brunskill/Getty Images for IPTL 2014)


Millions of Americans are dreaming of financial freedom. Others are hoping to achieve Financial Independence Retire Early (FIRE). How many of them are making smart financial moves to help make those dreams a reality? How many more are sabotaging themselves?

If you combine the effect of compound interest and time, anyone can become a millionaire or even a multimillionaire.
Here we will be covering some of the most common issues that will prevent you from ever becoming a member of the Millionaire Club.

Try to avoid these 12 common financial moves that will make it even harder to become a millionaire.

REASON #1 You Are Not Investing

Without some investing, you will have virtually no chance of accumulating a million-dollar net worth. Even if you were to win the lottery or receive a large inheritance, it would be hard to make that money last without investing it.

Example: How to Accumulate $1 million

CASE STUDY 1*: Let's say you wanted to accumulate $1 million by the time you were 70.

  • Option 1: Starting at 22 and earning 1% (after any taxes and fees), you would need to save $1,354 per month to become a millionaire. That will be tough or impossible for most people.
  • Option 2: However, with the help of compounding interest, if you were able to earn a 10% return every year (after taxes and fees), you would need to save just $71 per month. That is less than $2.50 per day. I'm confident we could all find a way to come up with $2.50 per day to become a millionaire. Right?

This is a simple example of how compounding interest can help you build wealth faster and easier. Each option has the same result, a net worth of $1 million, but you could save 95% less thanks to the benefits of compounding interest.

To make this point another way, if you saved $1,354 per month from 22 until 70 and earned a 10% return every year, you would have accumulated more than $19 million.

REASON #2 You Choose Not to Pay Yourself First

Even with the perfect investment portfolio, if you don't adequately fund it for your financial goals, you will never become a millionaire. Pay yourself first. After all, it is not what you make but what you keep. I know plenty of high-income-earning folks who have a negative net worth. Conversely, I know plenty of people who have accumulated a fantastic net worth on merely good incomes.

Get started now. There will never be a better day to start saving than today. Even if you can only save a tiny amount, you will be better off than if you never started. I bet you will be surprised how you don't even miss the money you are socking away. That tiny savings rate can grow over time into something substantial.

CASE STUDY 2*: Let's say you just turned 40 and want to become a millionaire by the age of 70.

  • If you earned 1% net of fees and taxes, you would need to save $2,383 per month. That is $28,596 per year to become a millionaire.
  • Assuming a 10% net return on investments, you would only need to save $442 per month to become a millionaire.
  • Remember, these numbers continue to grow the longer you wait. Just starting at 40 versus 22 translates into needing to save nearly six times as much per month. GET STAR AR TED NOW! No matter your age, the sooner you get started, the better off you will be.

REASON #3 You Live Beyond Your Means

Inflation has been busting some budgets lately; even without that, many people are spending more than they earn. Living beyond your means is not a good way to build wealth over time.

REASON #4 Drowning in Debt Payments

Being in debt is expensive. Compound interest can help build wealth and keep you drowning in debt. As your debt grows, the cost of servicing that debt (just paying the interest) also increases. Bad debt is a significant roadblock when it comes to becoming a millionaire.

REASON #5 You Ignore the Costs of Little Things

You can still spend a ton of money on cheap items. All these little expenses can add up.

I was speaking with someone who happens to have a multi-million-dollar income who canceled streaming services they weren't using. Individually, each service is pretty cheap per month, but if you aren't using the service, go ahead and cancel it. You can always sign up again if needed.

REASON #6 You Are Making Unhealthy Choices

According to a recent US Trust study, ninety-eight percent of millionaires consider good health to be their most important personal asset. Without your health, no amount of money will be able to buy back your quality of life.

Spend money to ensure you get all of the necessary screening and physical exams that your health care professionals recommend. If you don't have a primary physician, get one. Exercise (more) and increase the health value of your food. I am aware that real food (aka healthy) will cost more than processed junk food (with little real nutritional value), but this is the one area where I almost always advocate for people to spend more.

While I am a financial planner, not a medical professional, I know being healthy allows many people to work longer (if they choose). Likewise, healthy living also makes for a more enjoyable retirement.

REASON #7 You Aren't Getting Fiduciary Financial Planning Advice

If your financial advisor is not a fiduciary, they are not legally obligated to put your best interest first. When they follow the confusing "best interest standard" or suitability standard, they only have to show that something is ok for you rather than your best option. There are many people out there with big-name firms behind them, trying to sell you crappy investment products to earn a hefty commission.

REASON #8 You Don't Have a Spending Plan

I don't think anyone likes to budget. I know I don't. However, I do love having a spending plan. When people are good at handling their finances, they are not just treating their financial choices as random events. Money issues will not just take care of themselves. Yet, many people are surprised when that recurring monthly bill pops up (yet again, every month) on their credit card or bank statements. Simply put, a spending plan is about managing your financial expectations to avoid unwelcome surprises and leaving you with enough money left over for the better things in life. Think vacations, clothes, massages, or even money for a babysitter.

Firstly, take account of your major expenses that easily fit within your income. Think housing, car payments, insurance, cell phone, etc. Secondly, your spending plan will pave the way for bigger splurge purchases – like a luxury vacation or the down payment on a home or new car.

Without a spending plan, it is easy to see a bunch of money sitting in your checking account and spending it on something you don't need or want. When that opportunity to go on a dream vacation pops up, you may not be able to afford it. Worse, it could end up on a credit card, eventually drowning you in debt.

REASON #9 Inadequate Tax Planning

Proactive tax planning is a major part of becoming a millionaire. Keeping more of your hard-earned money frees up more money to be invested. The more money invested, the faster you can build wealth.

Talk with a fiduciary financial planner to see what other tax-saving opportunities you might be able to incorporate. For those with large amounts of taxable investments, tax-efficient investing can help add to your investment returns without taking more risk. There is a slew of strategies for the self-employed to help minimize your taxes.

REASON #10 You Chose the Wrong Career Path

If you hate your job or career, it will show. This can result in slower career advancement over time. Perhaps, you just burned out and quit. While it may be easier said than done, choose the right career path that comes with the potential to earn enough to support your desired lifestyle and offers more joy from your career along the way.

Reason #11 You Married the Wrong Person

First, I'll start by stating the obvious. Divorce is expensive. Splitting your assets in half will make becoming a millionaire harder.

Some studies show there are many financial benefits to being married. Choosing the wrong spouse will make becoming a millionaire much more difficult. If one spouse is a spender and the other is a saver, the spender tends to win out. When considering a life partner, don't forget to consider how you both think about money.

#12 You Don't Actually Need to Be a Millionaire

Some of you have found a way to live well on less. You may not even need to become a millionaire to reach financial freedom. If this is you, congrats. Keep doing what you are doing.

Paying off your home, maximizing Social Security , and working in a career that provides a pension are other great ways to potentially reach financial freedom and have the money to fund a happy and secure retirement without necessarily becoming a millionaire.

You don't have to do this all alone. Work with a fiduciary financial planner to get your financial house in order, and maybe, just maybe, you too will make it to millionaire status.

By David Rae, Contributor

© 2022 Forbes Media LLC. All Rights Reserved

This Forbes article was legally licensed through AdvisorStream.

James Britton CFP, CLU, EPC profile photo

James Britton CFP, CLU, EPC

Financial Planner
Britton Wealth Management and Planning Consultants Inc.
Fax : 866-202-2935