I’m 22 years old and I want to become a millionaire by 35. How do I do this?

Your mileage may vary, but this is how I recommend you to do (the earlier you start, the better):

A. First: drastically reduce your expenses

  1. Sell all the stuff you do not need (TV, Xbox, PlayStation, etc.).
  2. Quit shopping for the sake of shopping.
  3. Do not smoke, drink alcohol, do drugs, etc.
  4. Remove the Facebook, Instagram, Twitter, Pinterest apps from your iPhone so that you can only access them via your desktop computer (you will automatically reduce your wasted time by at least 90%).
  5. Sleep 8 hours a day, consistently.
  6. Meticulously decide whether you really need new stuff to buy.
  7. Learn how to do your own taxes. Once you understand how taxes work, you can get an accountant (and be able to check what is he/she doing with your tax filings).
  8. Ditch fake friends, high maintenance girlfriends/boyfriends, and all other people that actively undermine your efforts. A positive, resilient & optimistic attitude from the people you surround yourself with is essential.
  9. Never shop for food when hungry. Buy in bulk. Learn how to cook your own meals (do not eat out often). Do not buy bottled water, limit sugary drinks and other sugar-based stuff that only makes you fat. Limit red meat if possible, and prefer beans and vegetables instead.
  10. If you can, use the public transport or a bike. Accordingly, consider ditching your car. In the rare cases you will need / want to do a road trip, you can easily rent a car for a very reasonable sum without all the hassle deriving from car ownership.
  11. Do not upgrade your smartphone every year.
  12. Always pay your credit card in full at end of every month. Avoid loans and credit (i.e. paying interest to fuel expenses) like the plague. If something is out of the budget, you must come to terms with the fact that you cannot afford it: move on. We do not need 90% of the things for sale out there, anyway.
  13. Get a good health insurance with above-average coverage . Having a good health insurance will shield you (and your bank account) and allow you to avoid going bankrupt in case of medical emergencies (which occur very easily, even at younger age). Exercise (weight-lifting or anything else at least moderately stressful for your body) regularly: at least twice a week.
  14. Be curious about the world out there. Try to read many books (mostly non-fiction), especially in sectors out of your normal studies. Innovation comes from the ability to correlate information between different realms of knowledge.

B. Second: drastically increase your income

  1. Study Game Theory before looking for a job. After the Wikipedia page on Game Theory, I recommend you to start from The Joy of Game Theory(I have no affiliation with the author and I do not profit from linking this book in any way): you will understand how in a market of naturally conflicting interests, game theory and strategic moves will allow you to think rationally and achieve oftentimes optimal results with much reduced effort. This will be a critical advantage for you down the road.
  2. Study and understand the business niches where — based on your skills — you can get a better paying job that does not send you to mental hospital. Acquire new, useful skills (you do not need a degree for many highly important and well paid skills relevant in today’s job market). Relocate abroad if necessary or if your country prevents competition or innovation. Do not be scared. Be available to do risky jobs that your peers are not willing to do.
  3. Learn how to solve problems at work. While everybody at work just does barely “enough” (and limit themselves to complain when things don’t work), you will quickly become essential as one of the very few who solves problems. This works even if you are fat, ugly, inexperienced, old, young, whatever. Problem-solvers are golden nuggets in any business environment and rewarded accordingly.
  4. Once you become one of the few “essential” employees, you will employ Game Theory to force your employer to give you a better salary, better bonus, better exposure with clients, etc. Do it nicely but effectively. With a smile, you will be able to submit your employer into a so called “dominated game” where the only possible outcome is for you to get a better salary, etc. If you are an effective problem solver and still do not climb the ladder, it means that the opportunities at your current workplace are hopelessly limited. This can happen: do not lose motivation or settle like most people around you will do, just find a better job.
  5. Once your salary starts flowing in, immediately set up an emergency fund in cash of approximately 6 months of salary (3-months if you are particularly good at avoiding emergencies). This is cash that must be readily available for emergencies: not to buy you a BMW. Do not stupidly inflate your lifestyle and continue to be cautious with the way you manage and spend your money.
  6. Open a Stock Account with your bank and every month save 20%/30%/40%/50% of your net income and invest it in a low commission S&P500 ETF by Vanguard (like “VOO” or “VIG”: google them). Never touch this investment for at least the next decade. Save mercilessly and invest every month “no matter what”. Google: “dollar cost average” + “compound interest” in order to understand the benefits of this double-pronged strategy (in short: you will beat 90% of all the professional Fund Managers out there). Set up (both mentally and practically) a bare minimum that you must invest every month and deposit it into your stock account at the beginning of each month so you will not be able to spend it to buy useless stuff. This will do marvel to your sleep and to your income as long as you will be consistent, patient and NOT touch your investments for a decade or so. As soon as your career will progress and you will earn more, this strategy will also prevent you to fall into the “increased lifestyle” trap (where you spend more money on useless items just to show your status to your peers or because you become lazy).
  7. Once you have 200k/300k USD invested in a Vanguard ETF like VOO or VIG and they are pumping approximately 30k USD a year as compound interest and dividends (which you are NOT touching at any cost), you are able to focus your attention in order to start a side business to corroborate your income.
  8. Work at night, on weekends and holiday to kickstart your side business.
  9. Focus on getting the first 3 customers for your new side business (friends and family do notcount). Once you make 3 customers (amazing achievement!), focus on how to make 30. If in 3 months you are not able to reach the 1.000 USD / month threshold, you must focus on finding better cash-flow generating business ideas: don’t fight on price, the margin is essential. Learn from your mistakes (you will do many). Take low hanging opportunities that others don’t see. Study quirky, even awkward & neglected market niches, that oftentimes are a goldmine for those able to satisfy them.
  10. Once your side business starts making 10k USD / month you can start evaluating if your current salaried job is worth the effort / time / hassle. If not, make the jump to the self-employed world and focus on increasing the income from your side business to 30k USD / month.
  11. Sooner rather than later you will be a millionaire. The first million is by far the absolute hardest.

Thanks for reading this far. Let me know in the comments if you need any clarification. Good luck.

***1st Update***

Thanks for the fantastic comments and suggestions. I am trying to respond to all of them and I have slightly revised a few of the points above to better clarify my thinking. I also added a book recommendation on Game Theory as many asked in the comments for that (no affiliation).

*** 2nd Update***

Re: Real estate investments. I am aware that this may be a controversial point and I purposely did not include the real estate investment among the points above. Obviously there may be exceptions, but I would recommend againstdoing any real estate investment before you have already reached any solid financial independence goal. I am well aware that I may hold a contrarian view on this (we all know that everybody buys a house these days) but I recommend you to check the following factors before purchasing any real estate: a)purchase price; b)mortgage cost for the whole life of the repayment plan (10–30 years); c)insurance cost; d)maintenance cost; e)taxes; f)impact on your financial flexibility for the whole repayment plan and relevant opportunity cost; h)estimated profitability; i) monthly mortgage instalment cost vs. rent. I did these calculations myself and never I could find a real estate investment that could match the profitability of the S&P500 with the same degree of flexibility of investment/disinvestment, coupled with the (priceless) mental freedom coming from the fact that if I want to liquidate my whole investment tomorrow, I can do it in a whim (basically suppressing any opportunity cost). Since most of us have normal jobs and are not real estate professionals with asymmetrical knowledge of our local real estate market, in the long run a real estate investment is normally a bloodbath compared to the stock market. I would thus recommend to stick to the investment plan as outlined in the point 6 above and search patiently for a place for rent that is both cheap and not too far from your workplace.

*** 3rd Update ***

Re: Marriage.I am aware that a marriage may impact on this plan and, potentially, even disrupt it completely. For this reasons, I would advise the following:

  1. Choose your partner wisely: if your partner is only able to enjoy a lavish lifestyle there will never be a salary good enough for the two of you. This is probably the quickest road to financial and emotional misery.
  2. Do not marry too early: it is better to be safe than sorry. Be wise, and only marry once you are sure that it is the right thing to do. Postpone if you are not sure. Break-up if your partner is not the right one: being single is an order of magnitude better than being together with the wrong partner for the rest of your days.
  3. When you do get married, do not feel trapped by the idea that you must impress anyone with a wedding ceremony: be aware that 3 days after your wedding, people will plainly forget about it and move on with their lives. I have read that in New York the average wedding cost is above 70k USD : you will agree that this kind of expense for a ceremony, some flowers and a fancy dinner is totally nonsense. Invest this money wisely instead.
  4. Skip the whole “diamond ring” scam .

If you follow the above, you will be fine.

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