Are You On Track to Becoming a Multi-Millionaire? (2026 Edition)

0:01Brian Preston:This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required, compatibility and availability varies 18+. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications and more.

0:38Brian Preston:Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs. Are you on track to become a multimillionaire? Let's find out. Brian, I am so excited today because we're gonna share the crucial checkpoints on the way to financial independence so that you can know exactly what to aim for and what to celebrate. If you didn't know, I'm Brian, he's Beau, and we're financial advisors showing you the milestones to hit on the way to becoming a multimillionaire.

1:16And with that, let's jump right in.

1:24Brian Preston:So, Brent, over the years, we've come up with a lot of milestone markers that we want to share in order to help you guys stay on track with your financial wealth. Because we know that building towards financial independence is a marathon, not a sprint. But a lot of times, we don't want to just wait for that one finish line. We like to have small little markers, small little wins along our path to get there. Yeah. I mean, like you said, our people are achievers. And what I like about this is that there's no time frame. This is going to hit certain people at different times. There's no right or wrong answer.

2:01But what I do like is that on this journey, as you said, a marathon, I think you can get overwhelmed if you're trying to figure out how do I reach this successful point. It is so, so important if you can add milestones so you kind of know right where you are or what you should be aspiring to next. And these milestones are going to help out.

2:19Brian Preston:And these milestones don't happen in a specific order. For you, they might happen in the order that we're going to share them, but for others, it may happen a different order, and that is okay. So let's start, Brian, sort of what I think for most people, which is at the very beginning, and this one, it seems interesting, but it is a milestone that's worth celebrating that's actually reaching a$0 net worth. Well, think about it. A lot of us come out with a lot of weight on top of us, whether it's student loan debt, or maybe you made some bad consumption decisions when you first got that credit card opportunity.

2:53So to reach zero is a big milestone to actually celebrate.

2:58Brian Preston:Yeah, there was actually a study from Credit Karma that found that as many as 31%, one out of three Americans have a net worth of zero or less. And if you're in the younger generation, it might actually be a little bit higher. Gen Z, 41 % of Gen Zs have a negative net worth in millennials. 38%, so almost 40 % of millennials, just getting to zero is an accomplishment in and of itself. So why is it specific that younger people have a higher zero net worth? We want to get into actually what are the specifics. First of all, you just don't have a lot of assets yet. Yeah, they're likely early on in their career.

3:36Brian Preston:They don't have a lot of margin for investing. There's not a lot of money left over to actually be able to save. And in addition, they're young. They actually have not had a lot of time for what little they have invested to actually begin working for them just yet. Now, I feel like our job when people, because yes, you don't have, you haven't had a lot of time for your assets to grow. You haven't had a lot of time to even start saving and building these assets. But I don't want you to get down because you need to recognize you are literally a billionaire of time. and for all those that are ahead of you, when you look at people in their 30s and 40s, go, man, I wish I had what they had.

4:12I promise you, they're looking at you and saying, I wish I had the time that they had. And let us give you some illustration on this. If you start thinking about what you would have to save monthly to reach a million dollars, look at what a person who is 45 years of age, they would have to save and invest$1 ,800, greater than$1 ,800 a month to be a millionaire by the time they reach retirement at 65. For the 30-year-old, they would have to save$340 a month to reach millionaire status. But if you are in your 20s and you have just$95 a month, less than$100 a month will make you a millionaire.

4:53Brian Preston:The earlier you start, the easier it is, the more powerful your dollars can be. But obviously, starting out at these smaller sums, you stay negative net worth for a while. It takes a number of$95 a month to likely get you into positive territory because a lot of young folks coming out right now have a lot of debt. Maybe you just graduated college and you had to take on student loan debt, or maybe you went to go buy your very first automobile and you'd have cash to be able to pay for it in cash. You had to borrow money. So it's not uncommon for folks starting out, especially those in the younger generations, to start with a negative net worth.

5:33Brian Preston:They're just trying to crawl up to get to a dead zero starting place. Well, and look, I want everybody to, even though you might be starting out with debt, you haven't had a lot of time to build assets, I still want you to stay motivated because this is the reality. Give it some time. You are fresh. You're still trying to figure out, how's the career working out? You're trying to figure out what you believe and understand about money. We're hopefully going to help you out with that. But it is one of those things, you need to focus on what you can control. And in the beginning, what you can control is your consumption.

6:03What type of car do you drive? How much debt and how do you use credit cards? These things are important and you definitely can shape your future.

6:11Brian Preston:And there are rules in place that will help you with that. When it comes to buying a car, we want you to follow 23-8. When it comes to taking on college debt, we want you to follow the first year financing rule. And if you can do those things, you're gonna put guardrails around the financial decisions that you're making. And then as you begin to do that, we want you to track it. We want you to be doing an annual net worth statement. If you're not doing that, you're missing out, even if you're starting out on the negative, because you will not believe how much ground you can cover in one, two, three, four, five years.

6:43Brian Preston:And as you start to see it slowly start moving, whether you're going from really negative to slightly less negative, or from less negative to zero, or from zero to positive, tracking it every year might be that motivation you need to stay on the path. It's also gonna be a fun thing to celebrate in the future. I started tracking my net worth annually when I was 31 years of age. Bo, I think you started it in your 20s. I was 20. It is definitely something, even if it's negative, it's a very healthy habit. Start now. And then once you do that, then you'll get excited because when you hit your second milestone, your first$100 ,000, you will be able to look back and see how much ground you covered that allowed you to get there.

7:24So look, we like milestone number two, that first$100 ,000. When we talk about the first$100 ,000, we're talking about what does it look like when you add up both your emergency reserves, your Roth IRA, your 401k. These are all your financial assets. Guys, it is amazing when your army of dollar bills starts doing some of this work for you.

7:46Brian Preston:Now, they say the first$100 ,000 is the hardest, and that may be true, but it's also likely the most important money you will build. And why is it the most important? Well, one, it shows that you have begun mastering the behavior of deferred gratification and building for the future. Most people do not accidentally stumble upon having$100 ,000 of liquid assets at their disposal. They made the active decision to defer some of their income for tomorrow. They allowed that money to be invested, to grow, and it is a sign that you are making decisions that are going to make your future your financial life better.

8:22Now, look, I don't want to make this something it's not. So reaching 100 ,000 is not full critical mass, meaning you have not launched, your money is not making more than your day job yet. But I got to tell you, it is starting to work for you. And we actually have a great illustration to show you how powerful this first$100 ,000 is. Now, if we're being honest, if you were saving$10 ,000 a year, that's about$833 a month and you're making a reasonable 8 % a year rate of return on that, it is going to take you about seven and a half years, 7.6 years specifically to get to that first$100 ,000. But Bo, that's not where the magic, that's where the hard work was.

9:06But show them how the power of compounding growth,

9:09Brian Preston:where is the magic? Yeah, if you continue contributing just that$10 ,000 a year, do you recognize, And that same amount of time that it took you to go from zero to a hundred thousand, you will go from 500 ,000 to a million dollars. What took you seven and a half years to build up a hundred thousand dollars by the end of the journey, getting to a million, that same amount of time will create five times the wealth. The bigger your dollars get, the bigger the dollars get and the faster the money grows. So, you know, everybody who's seeing this out there on YouTube, you see the graphic we put up. But for our podcast listeners, Bo is describing going from$500 ,000 to a million dollars in the same amount of time, actually less than what it took to build that first$100 ,000.

9:54So this is not fully critical mass, but man, oh man, is it a powerful milestone to celebrate.

10:00Brian Preston:And what's great is your behavior can impact how quickly this moves. Let's talk about if your goal were to save$100 ,000, how long would it take you at different savings rates? We're already set. If you're doing$833 a month, it would take you about 7.6 years to build up to$100 ,000. If you can save$1 ,000 a month, that number drops to 6.4 years. If you can save $1 ,500 a month, it'll only take you about four and a half years to build up to$100 ,000. If you can save$2 ,000 a month, it will take you right at three and a half years to build up to that $100 ,000. That means that you could not only reach milestone one, but also milestone two in three and a half years if you have the shovel that allows you to do that.

10:43I love the quote we put on the slide is that wealth building can feel slow, but you do have control where you can actually speed this process up. And by the way, this is an echo of what we talked about even under milestone one. We want you to be active and track your net worth. And there's no better way to do this than with our net worth tool. If you go to learn.moneyguy.com, you can see the exact net worth tool that Bo and I are using for ours. And what I love about this tool is it's got a great dashboard that actually tracks some of these milestones so you can be the perfect CEO or field general for your army of dollars.

11:19Brian Preston:All right, Brian. So we're tracking these milestones. And the first two, getting to zero and then getting to$100 ,000, require that you do a lot of work. But the more work that you do, you now create an environment where now your money starts to do some work. And milestone number three is a pretty exciting one. It's where your money, your investments are actually saving harder than you save. Well, you guys know when you start out, I remember, you know, starting out, I was excited when I got to$100 a month. And then I can remember as my wife and I got some promotions, we got to$500. And then it was a go out and celebrate by going out to eat when we got to saving and investing$1 ,000 a month.

12:01And what's really cool about that is you're thinking about how hard you're saving, but there will be a point, just like when we were talking about that first$100 ,000, where your money, because of the hard work of saving, that you're going to see a return on that investment that starts to exceed what your savings rate is. And you're like, whoa, this is what I'm talking about. My money is actually is starting to do more than what I had to do just through discipline.

12:25Brian Preston:Yeah, think about this math. If you have a portfolio worth$93 ,750 and you earn an 8 % rate of return on that, your rate of return would generate$7 ,500 per year. That's the max contribution for Roth IRA. So if you're putting money in your Roth and you have 93 ,000, it's like your money made an extra Roth contribution for you. If you have$306 ,250 saved and invested and you make 8%, well, now your portfolio made$24 ,500 in a year. That may be more than you're putting in your 401k. That would actually max out a 401k. And what you'll see is as your portfolio grows and as the dollars get bigger and bigger, you'll start to recognize your portfolio will get to the point where it likely has the capacity and the ability to actually save more dollars per year, to actually add more to itself than you can save by exercising deferred gratification.

13:21What I like is when you start reaching these milestones, it's not like you stop doing the good behavior. You're actually getting two Roth IRA contributions that year. Your money's saving this much. You're still contributing your$7 ,500. Your account gets to$306 ,000. You put in$24 ,500 into your 401k, your account puts in$24 ,500. I can't tell you how many clients, when I have review meetings, when we've been clients for a number of years, I show them the partnership of what the assets are growing while they're contributing. It truly is a partnership of letting your money work just as hard as your discipline.

14:00Brian Preston:And if you want to see this in real time, if you want to play with some numbers, go to moneyguy.com slash resources and play with our compound interest calculator. You can put in your numbers, your information, and you can see just how quickly the numbers begin to stack. You can see just how powerful your army of dollar bills become. And if you're doing these things and you're playing with a compound interest calculator and you're saving for the future, you're tracking your net worth, if you do it long enough, you're likely gonna hit milestone number four. And milestone number four, it's a big one.

14:33Brian Preston:It's when you finally cross into the two comma club. It's where you get to say that I have a$1 million total net worth. Now, that is a big, you got to think about what do we say? Total net worth. So this is inclusive of everything. This is, yes, it's your investment, but this might also be your real estate or your primary residence. And for a lot of people, especially if you bought a house pre-2021, you might very well have experienced almost a 50 to 100 % appreciation in your primary residence. That's going to give you a huge boost towards reaching millionaire status total net worth. But I think it's worth recognizing.

15:17Brian Preston:So when you look at your net worth, it's everything that you own minus everything that you owe. Well, if you look across the entire United States of America, only 9 % of folks can do that math. Add up everything they own, subtract out everything they owe, and that difference be over a million dollars. Only 9 % of folks cross into that category. So if you are a millionaire, you're already in pretty prestigious, pretty elite company. But Brian already alluded to this. A lot of folks, what has happened might be less so because of your behavior, less so because of your savings. and more so because of what has happened that's somewhat outside of your control.

15:55Brian Preston:Because when we look at the median net worth of households in this country and how much of that is represented by financial assets versus non-financial assets, you can see that since 2020, since the pandemic, since we've seen the run-up in real estate prices, a lot of folks, the reason they're now crossing into millionaire status, the reason that they're now actually able to say I'm a millionaire is because their primary residence has gone up so much in value that it's created paper equity for them on their net worth. Yeah, this is one of those things I remember when this research came out and it was talking about and it was bragging about how net worths of US households had gone up.

16:33Like, I think it was greater than 30%. At first, the headline was so exciting. But then when I looked at this chart and you look at what the Federal Reserve was actually tracking, they have financial assets separated from net worth. And you see, unfortunately, the financial assets line, is flat. So from 1989 all the way through 2022, it's kind of flat, meaning Americans are not necessarily creating the separation of their army of dollar bills. And that's why I felt like it made sense if we laid out the pros and definitely the cons of what it means to cross into millionaire status or two comma club, as you said, counting your home equity.

17:13Brian Preston:So what's the pro? Number one, you're a millionaire. And we don't want to take that away from anyone. Even if the reason you're a millionaire is because your home equity has increased, you still made the decision to buy a home. You still did the hard work of being able to put down a down payment and cover the mortgage. So it is something worth celebrating. You are in fact a millionaire, even if a lot of that is comprised of your home equity. And because you have a lot of equity in your home, technically, you can access that equity. You could potentially take out a home equity line or do some sort of cash out refinance.

17:45Brian Preston:It is wealth that is there that if you had to, you could access it. Or if you're someone who your retirement plan later on in life is that I'm going to sell my home and downsize and then I'll capitalize on that increase in value, that is a viable strategy. Those are all net positives to being a millionaire, even if a lot of that's equity. But it's not all positives when it comes to this millionaire status. Well, and that's why I don't mind, you know, breaking the seal off of the negatives here is because you should celebrate that you've crossed into millionaire net worth, but you live in this house.

18:21This is your shelter for your family. And you should know that when you cross into and you're trying to figure out if you're truly financial independent, unfortunately, you can't eat the house. That's right. It's not going to, the only way you can actually use the equity in your house is you either have to borrow off of it, which is far from kind of building financial independence, taking on debt when you need it is less than ideal. And the only other way is to sell the house, which is we just covered is your shelter. More than likely, you're going to have to replace that shelter. So you either have to downsize or you just are losing the ability to really maximize how this is going to serve or feed you in retirement.

19:00Brian Preston:And then another negative or another financial con that we see is that oftentimes this can give you a false sense of security. You're doing your annual net worth statement because you're marking your primary residence at what you estimate the market value to be or what Zillow says. It makes you feel like, oh, I'm doing really good. I'm building wealth. I'm bettering my financial circumstance when in reality, it might not be because of your behavior at all. It might just be because of some perhaps accurate, perhaps inaccurate estimate of what your real estate is worth. We want you to be careful.

19:31Brian Preston:We want you to celebrate, but we don't want you to celebrate too much on this milestone because we think where you really want to celebrate and where you can really get excited about behavioral decisions that you're making is in milestone number five. That's when you actually cross into the two-comma club and become a liquid millionaire in net worth. This is a big distinction. And when we talk about liquid millionaire, now, of course, take into account your emergency reserves, but this is where that Roth IRA, your 401k, all of your investment assets, even your retirement accounts, when you add those up, now you're crossing into the seven-figure status or two-comma club with your investment assets.

20:11And guess what? You can eat off of these. These are true, easier access to liquidity in retirement.

20:18Brian Preston:And why does this get exciting? Because as your assets grow, you begin now reaching the... Brian, what's the point? What kind of point is it that you reach when your assets get... Bowling point. Bowling point. That's the one. You reach it. Because look, you realize if you have$1 ,000 saved up and you make 10%, you make 100 bucks. That's great and it's wonderful, but it's not life-changing. $10 ,000 saved up, you make 10%, you make 1 ,000 bucks. $100 ,000 saved up and you make 10%, you make$10 ,000. But once you get to a million dollars, once you get into that seven-figure realm and you make a 10 % rate of return, well, now your portfolio has grown by$100 ,000.

20:57Brian Preston:That is likely more than you save in a year. that may even be more than you make in a year. It is a substantial sum of money. The bigger the dollars get, the bigger the dollars get, and the more impactful your rate of return becomes on your overall financial circumstances. Well, and I know the trolls because we've done this type of content before. When we talk about millionaire status, a lot of them are quick to tell you, hey, man, inflation has been just something horrible. A million dollars is not what it used to be. Okay, there's some valid points to that. But let me tell you, just like we shared earlier on that first$100 ,000 that took eight years to get to the first, but then we could build from$500 ,000 to a million with the exact same time, but it's just fivefold.