There are only 3 things you need, in order to become a millionaire. A source of income, financial discipline and time. And while the parameters of those 3 components will vary depending on each person’s unique life situation - anyone can become a millionaire with just those 3 things. Today, in this article, I’ll be going over the exact steps you need to take with those 3 elements, to help you reach that million dollar net worth.


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There are only 3 things you need, in order to become a millionaire.

A source of income, financial discipline and time.

And while the parameters of those 3 components will vary depending on each person’s unique life situation — anyone can become a millionaire with just those 3 things.

Today, in this article, I’ll be going over the exact steps you need to take with those 3 elements, to help you reach that million dollar net worth.

And don’t worry, this isn’t going to be just another one of those conceptual articles out there that only talks about having the right mindset and fostering good money habits, etc.

Here, I’m going to walk you guys through, step-by-step, a custom excel spreadsheet that I’ve built that outlines precisely how much money you need to save and invest, each year, in order to get to that million dollar mark.


The reason I wanted to cover this topic, is because within the past year, with the acceleration and growth of stock market investing, online entrepreneurship, digital content creation and the like — we’ve seen a sudden explosion of interest in wealth building and financial growth.

workers leaving work, laid off
Covid caused record unemployment levels in 2020. (Credit: StoryBlocks)

Some of it is fueled by the massive covid-19 related layoffs that happened in 2020 where a huge wave of the work force suddenly found themselves in a position to explore what could be next in their career and life stages.

While others saw the incredible growth events happen in stocks like Tesla and GameStop (and the subsequent decline) and immediately developed a case of FOMO (fear of missing out).

And for some, the lockdown and the lack of activity that was available last year, seemed to have sparked their entrepreneurial spirit — driving them to try new avenues of revenue generation they might not have otherwise considered.

girl with make up filming
2020 saw the rise of many new social media entrepreneurs. (Credit: StoryBlocks)

Whatever the reason, it seems like everyone has developed a sudden focus on new income generation and growth, which is great — but I wanted to focus on the other side of the coin and show you guys how to manage that income to help you build truly lasting wealth.

So to that effect, I’ve built a financial model that showcases a realistic scenario of financial planning that’ll lead you to building a net worth of a million dollars.

I’ll be walking you guys through this step-by-step,  to show you how much money you need to bring in, how much money you need to invest and how long you need to do this, to reach $1 million dollars.

And if you guys want, you can follow along with me, by going to my website and downloading this spreadsheet for free, using this link here.


Millionaire Tracking Model

Daniel’s Brew Millionaire Tracking File (screenshot #1)
Daniel’s Brew Millionaire Tracking File (screenshot #1)

The first thing you’ll see when you open up the excel file is a very simple paystub section in the center.

This financial model is divided up into 3 parts — first, this simple paystub section, that outlines how much money you are earning and where that income is initially allocated (including how much you are putting away for retirement and other long terms investment vehicles like your 401k and employee stock purchase programs, if your employer has one).

Daniel’s Brew Millionaire Tracking File (screenshot #2)
Daniel’s Brew Millionaire Tracking File (screenshot #2)

Then we have this simple budget section, here, that shows how we assign and instruct the remaining net pay you receive from your salary after all deductions are made. This is where you direct your money to your expenses and your additional post-tax investment options.

Finally on the second tab, we have the wealth tracker that monitors your pacing towards your million dollars of net worth — and we’ll go into more detail on that, later on in the article.

Daniel’s Brew Millionaire Tracking File (screenshot #3)
Daniel’s Brew Millionaire Tracking File (screenshot #3)

But let’s go back and start at the beginning.


Monthly Budget and Input

So, in the Gross Monthly Salary Section — let’s start off assuming you have a very modest salary of $50,000 per year. That breaks down into $4,167 per month.

Daniel’s Brew Millionaire Tracking File (screenshot #4)
Daniel’s Brew Millionaire Tracking File (screenshot #4)

Let’s also say that in the course of a month, you set aside 9% of your monthly wages to go towards your 401k — that’s $375 per month.

Then, let’s assume that you pay $83 a month for medical coverage through your employer, $25 for dental and $17 for vision — which turns out to be $125 of cost per month for health benefits.

Daniel’s Brew Millionaire Tracking File (screenshot #5)
Daniel’s Brew Millionaire Tracking File (screenshot #5)

Then we have the tax section. Here, payroll deductions for social security and Medicare are fixed by the IRS at 6.2% and 1.45% of your pay respectively and for federal taxes, if you look at the top right chart — it gives you a simple break of what you owe in taxes, based on your income bracket. (If you’re not familiar with how your taxes are calculated, then click here to go to another article of mine that goes over that subject.)

Next, we have your post-tax deductions, and if you happen to work for an employer that offers an employee stock purchase plan, that would be a great benefit to tap into. And for this exercise, let’s say that you allocate 3% of your monthly pay into this program.

Let’s also say that life insurance through your employer costs $83 a month — and you don’t participate in any more deductions after that.

That means that you taking home just over 38% of your gross pay each month — which turns out to be $2,577.

Now at this point, we move onto the simple budget.

(By the way, if this is hard to follow along, and you’d like to watch the video version of this walk through, click here.) 

Daniel’s Brew Millionaire Tracking File (screenshot #6)
Daniel’s Brew Millionaire Tracking File (screenshot #6)

Starting from the top, let’s say you rent an apartment or home at just under $1,000 a month.

Let’s also say that you spend just over $540 on food each month and that your utilities and car payments come out to just over $200 each.

After that, you’ve got auto insurance at $77 a month and auto fuel at $180 a month.

Cellular phone service and internet services also come in at around $77 each, as well.

That covers your monthly living expenses for a total of $2,345 of cost — leaving you $232, or 9% of the remaining net monthly pay, to allocate further to any individual investment options.

Now let me pause here for just a sec.

That last point about — covering your total living expenses and still having a little bit of money left over, is critical.

The hard truth is that in order to build wealth — you have to get to a point where you are covering your entire living costs on a regular basis and you still have some money left over to invest.

If you aren’t at point, if you are barely getting by with your income and expense level right now — then you are going to have to make some hard choices, to either make more money or reduce your costs.

That might mean starting a 2nd job, or picking up a side hustle or downsizing to a smaller apartment or home and cutting out some of the non-essential spending in your life. 

The point is, in order to build wealth, you need to have enough surplus money so that you can send out them out into the market — and have them earn money and bring it back to you.

So, having said that, back on the financial model — let’s take a look at how we can invest that remaining $232 in our budget.

Our additional investment options are listed in the Personal Investment section and let’s assume you put $52 into your emergency fund each month, $129 into a Roth IRA and $52 into a separate individual brokerage fund, each month, for any short term investing objectives you may have. And there you have it, every dollar is assigned a role in your budget.

Now, before we move on, it’s also important that we address the 5 assumptions that we’ve made here on this first tab.

Daniel’s Brew Millionaire Tracking File (screenshot #7)
Daniel’s Brew Millionaire Tracking File (screenshot #7)

First, this model assumes that you have a regular steady paycheck coming in each month — meaning you work for a company that provides you a W-2. If you’re a gig worker or run your own business, you’ll have to adjust the inputs to this model slightly to fit your particular situation.

Secondly, as you’ve noticed we didn’t include any state income tax in our paystub section — so we are assuming you live in a state that is without local income tax.

Next, we assumed in this scenario that you’d be a renter, and not a homeowner, as that changes how we calculate your net worth.

We also, for the simplicity of this model, didn’t take into account any tax deductions that you might qualify for each year when you file your taxes. In reality, that might actually reduce the amount of taxes you pay each year.

And lastly, we assumed you don’t have any major outstanding bodies of debt in your life currently. Having debt is one of the biggest barriers when it comes to building out your wealth, so if you do currently have some debt in your life, now would be the time to make sure you create a plan to address it — before it becomes much later on in your financial life stage.


Millionaire Tracker

Now let’s move onto the tracker.

Daniel’s Brew Millionaire Tracking File (screenshot #8)
Daniel’s Brew Millionaire Tracking File (screenshot #8)

The way this sheet is structured, is that you have your income, and payroll deduction investment plans on the top half of the table, followed by your net yearly income and expense lines — and then your after-tax, individual investments at the bottom.

The table extends out for the next 30 years and with each passing year, it shows an annual appreciation rate.

Starting with your gross income, it’s customary, when you work for a company, that each year you receive a standard merit increase of about 3%, depending on how the industry, your company and how you have performed throughout the year. You may not always get this — and it may not always be the same rate, but for the sake of this exercise, let’s assume this is constant, at 3%.

Next, for both your 401k and the employee stock purchase plan, given that these are equities that you hold in the stock market and that the market typically has had an average annual return rate of 8%, over the last 30 years, we’ll apply that here for both line items as well.

In your net yearly income and your yearly living expenses section — it’s important to note that as your gross yearly income increases each year, these numbers will increase as well, but they’ll always increase in same proportion to the ratio of gross income, net income and expenses you’ve had in your first year.

So that means, if in year one, your net monthly take home pay is 61.8% of your gross income and your living expenses are 91% of that net monthly take home, then this financial model will retain the same percentage relationship between these figures throughout the years, regardless of how high your gross income gets.

And lastly, we have the personal investment section — and starting with our emergency fund, we’ll assume that you’ll park that in a money market fund that yields on average, an annual return of 0.05% (what most money market accounts in large banks yield).

Then, for the brokerage and Roth IRAs, since these will likely be equity holdings, we’ll input the same 8% that we applied to our 401k and ESPP calculations.

Daniel’s Brew Millionaire Tracking File (screenshot #9)
Daniel’s Brew Millionaire Tracking File (screenshot #9)

So with that, let’s look across the model to see where we hit the $1 million dollar mark. It looks like in this example, — by year 30, we eventually hit $1 million dollars of net worth.

That means if you start off with a $50,000 salary, and build/stick to a disciplined financial plan, of budgeting and investing — you can become a millionaire in 30 years time.

Now obviously, a lot can happen in 30 years — and this is actually a very conservative financial plan. In the course of your career, most ambitious people will switch companies about 4–6 times, get promoted a handful of times and generally increase their salaries way beyond the annual 3% merit increase that I’ve inputted here. So, for most people, realistically — you could get to the million dollar mark a lot sooner than 30 years.

Daniel’s Brew Millionaire Tracking File (screenshot #10)
Daniel’s Brew Millionaire Tracking File (screenshot #10)

So just for fun, let’s go back to our simply pay stub view and see what happens if we only change our first initial salary, to say… $100,000 per year and keep everything else the same. So, if we do that, then it looks like we’ve just shaved 7 years off of our timeline and we hit a million dollars at year 23.

And at $150,000 per year, your timeline truncates by 4 more years and you hit $1 million in net worth by year 19. 

The point I’m making here, is that you have the power to directly affect this model in two ways — by earning more income, or better managing that income. It’s important to recognize that you are empowered to do this now — and the sooner you start, the sooner you will become a millionaire.

And feel free to download & play with the model yourself — this is a very simply model that I only spent a couple of hours on, but it has all the built in formulas to recalculate all of these figures if you decide to change any of the inputs, in purple.

Talking around coffee table
Prudent financial planning is the key to wealth building (Credit: StoryBlocks)

So the conclusion here is, this model shows that even at a very modest $50,000 dollar yearly income — becoming a millionaire is possible if you are smart and mindful about your finances.

You should never underestimate the power of financial discipline and the compounding effect of time, on your investments. Understanding this is one of the key mindset differences between the wealthy and the not-so-wealthy.

So again — if you’d like a free copy of this excel model, just go onto my website through my link here and you can download it.

So with that — I hope this article and this excel model helps you take one step closer to smart financial planning and one step closer to becoming a millionaire.


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**** Disclaimer *****

The content here is strictly the opinion of Daniel’s Brew and is for entertainment purposes only. It should not be considered professional financial, investment or career advice. Investing and career decisions are personal choices that each individual must make for themselves in accordance with their situation and long term plans. Daniel’s Brew will not be held liable for any outcome as a result of anyone following the opinions provided in this content.

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