Millionaire Mindset: 5 Sobering Realizations Of $1M

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What dollar amount comes to mind when you think about “making it“?

Your response may be similar to, When I’m a millionaire!

It seems to be the perfect ideal.

That junction between a dream and a goal – where the lofty and the attainable converge.

When most people think of a million dollars, they think of mimosas on the beach while the rest of society commutes to work.

The fact of the matter is, there is more to becoming a millionaire than many people realize – at least until you stop to think about it.

When you decide millionaire status is within your reach – consider it a goal, not a dream.

At this point, you have come to these 5 realizations.

millionaire mindset

Millionaire Mindset: 5 Sobering Realizations Of $1M

#1 – Luck is for the lucky and the naive.

Think back to when you were in school.

There was always that rascal who would exclaim, “XYZ, when will we ever really use this in life?”

Upon hearing the teacher’s answer, that student would name off countless celebrities who were multi-millionaires and never graduated high school.

To that kid, I have one question: What happened to everyone else in the celebrity’s classes?

You see, the celebrities got mostly lucky. Fame, lotteries, lucky breaks, they happen, yes, but they are not common.

For the rest of us, we need to earn, save, invest – and above all, be money smart.

Luck does not (generally) come to those who expect it.

If you’ve decided that you’re going to earn your 1st million, that means you’ve set this as a goal.

As with any goal, just saying you want it is not enough.

You need to think through a feasible path that gets you there one step at a time. In other words, you need to put action verbs in your sentences.

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#2 – $1M may not be enough.

That’s right, $1M doesn’t go as far as people may think.

If you retire on a million dollars, then that mimosa on the beach is going to be a vacation – not a daily lifestyle.

It’s not going to buy you a 10,000-sq. ft. mansion or a garage full of exotic cars. It will not allow you to spend with reckless abandon for the rest of your days.

In fact, those who reach this goal will tell you that they don’t even have direct access to a large portion of their money.

Now that may raise a few eyebrows, but it’s true.

When setting the goal, most people will choose to have a net worth of $1M rather than have a bank account with that balance.

Significant amounts of your money are invested in your home, 401k’s and IRA’s, dividend-producing stocks, and a few other lesser accounts.

How much of this is readily available for you to spend?

Most of the cash is not accessible, but let’s face it, why would you want to drain any of these accounts?

They’ve worked well for you so far, and now they can really start chugging out new earnings!

That is likely the most profound concept an aspiring millionaire will realize.

Once they’ve earned the million, they want to keep earning.

Thanks to the banking miracle that is compound growth, once you have a sizable investment, it will grow faster and faster!

Once the goal is met, it gives you a serious head start (with serious momentum) toward your next lofty goal!

As I’ve heard, “The first million is the hardest”.

#3 – Invest early for compound growth advantage.

millionaire mindset

Let’s talk more about compound growth.

Imagine you invest $1,000 and earn a 4% annual return.

The first year, the money will grow to $1,040.

Next month, let’s invest an additional $1,000.

If you earn 4% again, it’s not just 4% of the $2,000 you have invested. It will include the $40 of growth you earned the prior month.

You will bring in a fresh $81.60 your 2nd month.

You have a total of $2,121.60 (1,000 + 40 + 1,000 + 81.60).

When you start investing, the investment grows relatively slowly at first.

$121.60 isn’t a lot of money compared to the $2,000 invested.

It takes time for the investment plus its growth to become sizable.

A way to facilitate this is to start investing earlier.

Let’s take a look at a simple example.

A 25 y/o investor will do significantly better than a 30 y/o investor in the long-run.

Here are the similarities:

Starting balance: $0

Annual return: 4%

Retirement age goal: 55

Monthly contributions: $1,500

Here are the differences: 

25 y/o invested balance at retirement: $1,049,909

30 y/o invested balance at retirement: $779,611

That’s a difference of $270,298.

After considering yearly contributions of $18,000 ($1,500 x 12), we’re looking at a compound growth advantage of ~$180,000 ($270,298 – ($18,000 x 5)).

This example shows how useful compound growth is, but it also emphasizes the importance of investing early and consistently.

In the case of the 30 y/o investor, they would have to increase their monthly contributions to $2,000 (vs. $1,500) to result in  ~$1M by the age of 55.

This is one area where procrastination can hurt you. If you ever catch yourself saying you’ll look into learning about investments later – reconsider. 



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#4 – It’s a lifestyle: A millionaire may live right next door.

millionaire mindset

As I mentioned above, there is a lifestyle that people “assume” about millionaires.

The assumption is that they fly to Paris on their jet for an extravagant dinner and stay for dessert. Crème brûlée, anyone?

The reality is that they will likely cook dinner at home, making a delicious recipe they found off the internet that aligns with the store sales for the week.

For the average person, becoming the millionaire next door takes some sacrifice.

A lifestyle is adopted within your means. Call it what you will – frugal, strategic, intentional.

Paying yourself first is your M.O.

Think about this. There are actually millionaires all around, but we don’t recognize them because they are not trying to show off.

Usually, it’s only the “ lucky ones ” who are so flashy with their cash.

For those of us working for it, we realize that a penny saved is a penny earned.

If you are interested in reading more about “The Millionaire Next Door” – check out the book by Thomas Stanley. 

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#5 – $1M is a means to an end.

Becoming a millionaire is not the end-all-be-all goal of saving and investing. It is simply the process by which you achieve your ultimate goal, whatever that may be.

Indeed, it will be exciting to see a 7-digit “net worth” value on the computer screen, but that doesn’t change much.

Then you start asking the hard questions.

What now?

Where do I go from here?

Here are some ideas:

 Decide to maintain the momentum and set a new money goal for yourself. $2M?

→ Redefine your 9-5 by starting a side project that a strong financial ladder made possible. Your days, defined your way.

→ Semi-retire and work a part-time job while pulling dividends and capital gains from your investments.

Whatever you decide, it’s always good to have options.

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Who Wants To Be A Millionaire?

While it is a dreamy goal, $1M is perfectly attainable.

There are ways of reaching the goal which is (nearly) guaranteed, but they require work, intelligent choices, and planning.

There are many people who just know they’re going to hit the lottery or “be discovered”, but they will soon realize that luck is not a sound investment strategy.

Once you have earned your cash, you will have earned your choice.

It really comes down to a decision between buying short-term lavish stuff or buying the freedom to live comfortably long-term, with or without a job.

Time to grab a mimosa and think hard. What is going to come next?

Looking for a new way to budget? Get the spreadsheet and the 20-page guide to get you started on your path to conquering $1M. It’s much more than having a “budget”. It’s about knowing where your money is going and seeing the big picture.



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Do you have a millionaire mindset? Have you already reached it? If not, what are some of the steps in your plan to make that happen? What do you plan to do next?

Photo cred: Pixabay
Last edit 5/2/2018


  • Mr Defined Sight

    Hi HP, fantastic post! I think the millionaire mark is a great achievement but I don’t believe it should necessarily be the end goal. We are more focused on building up cash flow and having multiple income streams. And of course with that, the net worth will most likely rise even though I’m not so hung up on it.

    • Full-Time Dollars

      Hey Mr. DS. What you’re seeking is optimal. For many, $1M is enough, for others, it scratches the surface.

  • Tom from Dividends Diversify

    Hi HP, As you say, a million isn’t what it used to be. In the major US population centers of Chicago, LA, and New York and other areas where housing is so expensive like Seattle, a million is mainly a ticket to some financial peace of mind. That shouldn’t be underestimated, but the reality is that a person with a million is still probably working full time to pay the bills. They are likely not living some life of luxury. It is really just a stepping stone or a means to an end as you say. Tom

    • Full-Time Dollars

      Sure enough. Even so, people can get discouraged knowing this and as a result, they don’t save or invest. Any bridge that can be built will make a difference in the long-run.

  • Steph

    When I first started diving into the personal finance world, I just assumed all the millionaires got lucky. They timed the market well, and just had luck on their side. Turns out that was a gross misjudgment!!!! You’re right, reaching $1mil will usually take mix of hard work and dedication, which is definitely anyone can do. These are great points!!

    • Full-Time Dollars

      Hey Steph! Yes, definitely. If you work at it it’s not a matter of “if”, it’s a matter of “when”. You got this!

  • Martin @ DiscussPF

    Excellent points. I hear so many people (especially on social media) exclaim they will be millionaires and successful and they don’t need education or skills for it because so many celebrities didn’t need it. That’s often luck. You need to work hard to gain an advantage and get ahead. $1m certainly doesn’t go as far anymore, you probably need way more than that to live the lifestyle you think $1m will give you. I know after doing calculations and really looking into it myself (rather than just dreaming) I found that I would need a lot more money than that. I’m young, so I am working hard to earn as much as possible and make the smart investments along the way which will see me reach as high as I can possibly go. Great post!

    • Full-Time Dollars

      Thanks Martin. The luck part is what gets me the most. Working to $1M is not a guessing game. With anything in life, if presented the opportunity, reach out and seize it.

      I agree, $1M is not going to give you lavish. The type of lavish and wealth in my latest read, “The Last Mrs. Parrish” where $200k can be spent at a whim, private jet, a NYC apartment, Connecticut luxury home, and a lake house. Wowza.

      You have time on your side! Even though I started investing in my mid-20’s I wasn’t intentional about working towards a $1M goal. Earn, save, invest! We’ll get there sooner or later.

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