How to Become a Millionaire in 20 Years

How to Become a millionaire in 20 years

It’s a good question. How do I become a millionaire in 20 years? It’s a question which shows desire, aspiration and an ambition to reach financial freedom for the benefit of yourself and your family. Good question, dear reader! Here is a 3 step approach to help you become a millionaire in 20 years.

The problem with how most people ask the question is the suffix. They ask the question, but usually add a little word on the end:

  • How do I become a millionaire FAST?
  • How do I become a millionaire WITH NO WORK?
  • How do I become a millionaire OVERNIGHT?
  • How do I become a millionaire FREE?
  • How do I become a millionaire TODAY?
  • How do I become a millionaire BY 20?

Here is the problem. For 99% of millionaires, reaching that position doesn’t come easy. It takes time, work and effort. Other than lottery winners and overnight successes, the answer to how I become a millionaire is “slowly”. Even then, as some high profile cases have shown, it takes this hard work and effort to stay a millionaire once you are there.



So, How Do I Become A Millionaire In 20 Years?

The most common way is with hard work, saving, consistency and time. Oh, boring answer! I know, I know.

But, the good news is that it makes it achievable for everyone.

According to this 2009 article from the Mail Online, Britain’s average family is worth £204,000. Let’s ignore much of the “Possessions / Vehicles” and “Property” from this amount as these values won’t really contribute to your future income or pension. Therefore, let’s take a starting point of £30,000.

Let’s look at a 3 step approach to how to make this average Briton become a millionaire in 20 years.


Step 1 – Cut Your Personal Expenses (Spend Less)

If you want to be a millionaire in the long-term, you need to make some short-term sacrifices – you need to trim the fat and live a little frugally. According to this 2012 article from the Daily Telegraph, the cost per month for the average UK households is:

Commuting – £223 per month

Petrol – £222 per month

Cable TV – £55 per month

Home Insurance – £37 per month

Mobile phone – £33 per month

Utility bills – £172 per month

Mortgage payments – £376 per month


Further information taken from this report from the Joseph Rowntree Foundation:

Food – £598 per month

Alcohol – £79 per month

Tobacco – £22 per month

Leisure (inc. eating out & holidays) – £526 per month


I’m afraid that it’s time to cut back.


Commuting / Petrol – There are so many ways to save here. Drive less, walk more, cycle more, take public transport, downgrade your car, avoid car loans, etc, etc. Let’s assume we can save 10% here if we try hard enough.

Saving: £45 per month


Cable TV – Get rid. You can see most of what you want on the internet these days. And TV isn’t good for you or your family. Get outdoors guys!!

Saving: £55 per month


Home insurance / mobile phones – comparison websites are your friend. The “average household” is undoubtedly paying over the odds. Remember, modern companies don’t reward loyalty, they reward new custom. Also, get on quidco and earn some cashback to save even more. Another 10% saving is easily achievable here.

Saving: £7 per month


Utility bills – energy wastage is as bad for your wallet as it is for the environment. Step 1, change deals. You may save 3-5% per month by choosing the cheaper tariff. As per above, you can earn up to £50 cashback through quidco by changing provider. That’s equivalent to another 2.5% saving. Then, cut back on your usage. Turn your lights off, wear some jumpers, use your washing machine and dish washer less. Take a shower instead of a bath. Oh, and once again, turn off the TV and get outdoors!! You can easily reduce your costs by another 10% using these methods.

Saving: £30 per month


Mortgage payments – with super low rates currently available, remortgaging to find a cheaper product may be greatly beneficial for you. However, given that this is hard to estimate, we won’t note any saving against this.


Food – in a post I wrote over at, I estimated based on evidence from personal finance bloggers that you can comfortably live off $425 per month. Converting this into GBP, and I would estimate that, if you shop sensibly, you can comfortably live off £265 per month. Avoid brands and shop for bargains. Let’s give ourselves a lot of leeway in this figure and assume we can live off £350 per month.

Saving: £248 per month


Alcohol – you might argue that you need a stiff drink after these cut backs! Well, you may be right. But, a bottle of wine a week should be enough (for your wallet and your health), so we will budget £40 per month

Saving: £39 per month


Tobacco – don’t smoke.

Saving: £22 per month


Leisure – this may be slightly controversial, but life is for enjoying. Make sure you are spending your money on experiences which you enjoy and remember. Don’t spend it on expensive clothes, but do feel free to spend it enjoying your time with your friends and family in ways that truly make you happy. That said, £400 per month is surely enough to do this in relative style!

Saving: £126 per month


Let’s add them all up. Total savings are £572 per month. If I had said, you can save £572 per month by cutting back, I wouldn’t have believed me! However, we can see from the above that, for the “average Briton”, it is definitely achievable.


If you are finding it hard to save, consider my techniques for saving and tips on making a budget.

Also, signing up for a cashback and rewards credit card can reduce your spending even further.



Step 2 – Earn More Income (Earn More)

The other way to increase your monthly position is to earn more money. This may seem hard at first, but once you start trying, you will realize it’s not as hard as you thought. Just have a browse through some of these options to get you thinking and see which methods suit your lifestyle:


Earning: £100 per month



Step 3 – Save, And Invest, More Of Your Income (Save/Invest More)

Great – we have managed to save £572 per month and earn extra income of £100 per month. If we put this £672 per month aside, it will take 1488 months or 124 years to reach £1 million. Damn!

However, this doesn’t consider our saving and investing options.



Firstly, before anything else, take advantage of your employer’s matched contribution scheme on your pension. These will vary in amounts, but according to a recent report, the average FTSE 100 employer currently offers 10% in matched contribution.

Let’s assume the employer of the “average Briton” matches 6%. For this person, earning £24,640 per year, this equates to £123.20 per month if you contribute the same.


Save your income

On top of the above, it is advised that you save 10% of your after-tax income for your long-term future. Let’s assume you can do this (as I believe that the average Briton can if they focus their attention on saving).  This provides an additional £154 per month.



Here comes the exciting bit – compound interest! Woo!

For simplicity, let’s assume we invest an ETF which tracks the FTSE 250. This, based on historically prices, has increased by 8.9% per year since 1985. Include the current dividend yield of around 2.3%, giving a total annual return of 11.2%.

However, we will assume after fees that the return we can obtain is 10% per annum.


Now for the math

Savings (£572) + Earnings (£100) + Pensions (£246) + 10%  Saving (£154) = £1,072 per month

Investing this each month at 10% per annum returns, in 20 years time, we will have:

£1,072 * ((1.120 -1) / 0.1) = £810,464

From the introduction, the average Briton also has £30,000 in investible wealth today. Add this to the figure above:

£30,000 * 1.120 = £201,825


Therefore, in 20 years time, the average Briton has £1,012,289. We have made the average Briton a millionaire!


Could I Do It Even Quicker?

You certainly can.

The eagle-eyed amongst you may have realized that all my spending figures above are based on a average 2 parent, 2 child household. On the other hand, the earnings are based on the average income of an employed individual in the UK.

Therefore, if you are a two-income family, and you work hard towards your goals, you may be able to put more than 10% towards your savings each month and knock a couple of years off!


How Do I Become A Millionaire In 20 Years?

For the majority of us, it’s not by creating the new facebook or twitter. It’s through spending less, earning more, saving more and investing wisely and benefiting from the power of compound interest and time.

How inspirationally boring!!


Want To Keep Yourself Accountable?

For those of you who aim to reach this goal, why not hold yourself accountable and join the millionaire’s club over at

And, it’s in dollars. So, for all my UK readers, you only have to reach a total of about £625k to get there!

Become a millionaire

I’ve already joined up, so why not come and join me?!

Better still, you could join the Moneystepper Savings Challenge. There’s plenty of people in there who share your goal whether they are currently in debt, or whether they are a long way down the road to become a million in 20 years!

Moneystepper Savings Challenge

If this article helped you answer how to become a millionaire in 20 years, then I would be very grateful if you would share via social media.

7 thoughts on “How to Become a Millionaire in 20 Years

  1. I think I’ve trimmed all the fat I can trim really. My focus is on making more money. The only other big move I can make is to leave this state and find a cheaper one to live in. It’s something I still think about.

  2. Haha… no cheating! You still need £1,000,000 🙂 Great article though for sure – hope your readers start NOW and let he power of time compound their savings for them!

  3. Pingback: The Million Dollar Club & Millionaire To-Do List! | Budgets Are Sexy

  4. I’ve cut my expenses down to a place where I’m comfortable (aka where I’m only paying for what I truly value) and I am always working on increasing my income. Once my debt is paid off, I will be saving and investing more aggressively to reach baller status way before I’m old and gray. Great tips!

  5. I can see additional areas to cut back on!
    Am also looking much into making more money over the long run – through upgrading my skills and running my side business. For now those are the paths am banking on to deliver me to millionairehood!

  6. It’s all about making more, saving more, and investing wisely! If you get good at all three, then you’ll be a millionaire in no time. If you suck at one or two of these, it will be almost impossible to get and stay there 🙂

  7. I like the ftse250 idea, capture decent growth without the risks. I might even put a % or mine into it too, and I’m on the “enterprising” side of the scale according to Ben graham..

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