How to Retire a Millionaire Starting From Scratch at 30

How to Retire a Millionaire Starting From Scratch at 30The lights are dimmed. The candles are lit. All eyes are on you.

You make a silent wish to become 29 again and blow out the candles against a convivial backdrop of claps, cheers, and whistles.

You have officially turned 30.

As you mentally comb through the last decade of your life, you can’t help but feel proud of how far you’ve come.

You’ve finally reached a point in your career where you can cross out college internships from your resume.

You’ve moved out of your parents’ place, learned to make three different kinds of pasta, and even explored a few exotic places that require a tourist visa and the ability to ask “where’s the nearest washroom” with hand gestures.

You’re getting pretty decent at this whole adulting thing.

There is just this one tiny thing that nags at you.

Fine, three not-so-tiny things:

  • You’re still paying off your federal student loans
  • You have no clue what your credit score is
  • You’re pretty sure you haven’t begun saving for retirement yet

Basically, money stuff.

Thankfully, you’re reading this article.

And I’m here to ease all your financial worries, and assure you that 30 is a perfect time to embark on Act I of your journey towards a cushy retirement – even though you might not quite believe it yourself.

I would know. I was that person.

Story Ahead

As a naïve 30-year-old, I dragged myself to a local bank branch one day.

Mind you, I was only halfway through reading The Wealthy Barber at the time, not yet fully grasping the gravity of the book’s message, but was somehow convinced that I was ready to open a margin investment account.

So I marched in with the confidence of a peacock.

The bank teller was a sweet lady who looked like she couldn’t hurt a fly.

After listening to my request, she asked if I wanted to open a TFSA instead, and briefly explained its benefits.

I stared at her like a deer in the headlight.

TFSA? Never heard of it.


So I barked, “Hold your horses! That sounds like a red herring.”

Okay, I was too chicken to say it out loud. But I was definitely thinking it.

Story Ended

Yup, one of my first forays into investing was through a bank teller.

This should discredit me as a personal finance blogger. Still, here I am, on the other side of financial enlightenment, brandishing a six-figure investment account, and a diploma from the School of Overused Animal Clichés.

Enough about me.

Let’s discuss how you could start with nothing and end up with $1,000,000.

The good news is, you have 35 years to make it happen.

The bad news is, well, there’s not really bad news because I’ve broken down exactly what you need to do each year, starting from right now.

Here’s your roadmap:

Year 1 and Year 2:

  • Pay off bad debts
  • Cultivate a healthy spending habit
  • Have a saving plan
  • Learn the basics of investing

Year 3:

  • Build an emergency fund

Year 4 to Year 35:

  • Save and invest $12,648.02 per year

Now let’s review each step in detail.

YEAR 1 & 2

The first two years of this journey are dedicated to building a solid financial foundation by clearing debts, brushing up on personal finance basics, and making sure that you have all the tools in your financial arsenal to supercharge the growth of your money later.

Pay Off Bad Debts

Before you step on the gas, make sure that your financial gas tank isn’t leaking.

When you lose out a portion of your disposable income to debt service each month, there is less room for everything else. That debt is dragging your entire financial operations down, and needs to be rid of once and for all.

After debts are out of the way, you can charge full steam ahead with other financial priorities.

That’s why the focus of Year 1 and Year 2 is on wiping your financial slate clean, if you have any “bad” debt.

What I mean by bad debt:

  • Credit card debts
  • Payday loans
  • Lines of credits
  • Car loans
  • Medical debts
  • Bank loans
  • Personal loans

You want to kill off bad debts first and foremost because they carry crazy high interest rates. As high interests rack up, you end up paying interest on interest – a nightmare scenario!

Bad debts do not include:

  • Mortgages
  • Student loans
  • Loans from your friends and family

Mortgages and student loans usually take years, if not decades to pay off, so it’s wise to tackle those debts in tandem with the subsequent steps of this 35-year roadmap. If you delay saving and investing until all debts are paid off, you would miss out on years of compounded earnings – not a worthwhile trade.

How can you effectively wipe out bad debts?

Tag-team it!

Reduce expenses, boost income, and throw every spare dollar you have at the debt like a ninja with shurikens.

Debt Pay-Off Formula

Reducing expenses:

Some sacrifices will be required, and extraneous spending will have to be halted for the most part. Life will be less comfortable for a while, but you don’t have to cut every little bit of fun out of your life.

Here’s what I’d do:

  1. Look for ways to lower housing, food, and clothing expenses
  2. Pick one hobby or self-care routine that you can’t do without, and give yourself a small allowance for indulging it (say, $50/month)
  3. Find free or cheap alternatives for other activities and things you enjoy (ex: watch videos on YouTube instead of paying for cable, borrow DVDs from libraries instead of going to the movies)
  4. Cut out everything that you don’t really need, use or enjoy

Examples of discretionary expenses you might consider cutting:

  • Entertainment subscriptions like Netflix, Spotify, Amazon Prime
  • Vacations
  • Spa treatments
  • Eating out

You might surprise yourself with how much you actually enjoy a leaner lifestyle.

Boosting income:

The more money you make, the more money is available for debt repayment, and the faster your debts could be paid down.

Usually, I’m all for side hustling to bring in a secondary income. But during the debt repayment phase, I don’t recommend starting an entrepreneurial side hustle, like blogging, selling crafts on Etsy, or starting your own consultancy business, because they usually take months to turn a profit, if not longer.

Given the urgent need for extra cash, finding ways to increase income rapidly is a more sensible approach.

Here are a few ideas for quickly boosting your income:

  1. Renegotiate your salary
  2. Ask for a raise (and make a compelling case for it)
  3. Sell possessions you no longer need on Craigslist, Kijiji, or eBay
  4. Pick up a part-time job
  5. Rent out a spare bedroom on Airbnb
  6. Rent out your car on Turo

Being laser-focused on debt repayment will allow you to dig yourself out of the debt hole and be in a top-notch position to create wealth shortly down the line.

Cultivate a Healthy Spending Habit

While you’re tackling debt, aim to simultaneously fix the root cause of this debt, be it mindset or lifestyle preference or something else, so you can stay out of debt forever.

Extraneous circumstances aside, debts get accumulated when people spend more than they make.

Part of the issue is that a good portion of the country is trapped in the cycle of poverty and has no choice but to go into debt to put food on the table and keep the lights on. Sadly, the overarching issue of wealth disparity is way above my pay grade.

The other side of the matter is our culture of overconsumption. For that, I have 3 pieces of advice to offer.

Advice #1:

In my humble opinion, when people buy things they don’t need, they’re either trying to fill an emotional void or to get a happiness boost.

And I say that with absolutely zero judgment. I was known to spend my way out of a bad day in my 20s, and I’m still working on curbing my materialistic impulses every once in a while.

When we see an item on display in the store, we honestly don’t care as much about owning it as we do about how it would make us feel. And the latter drives us to purchase.

Purchases Decoded

What if we can find ways to access those positive feelings without parting ways with money?

Positive FeelingsHow to Experience Them
Joyplaying with your kids, watching cat videos on YouTube
Relaxationhiking in a forest, taking a bubble bath, meditation
Comfortenjoying a warm beverage under the blanket, getting a massage from your spouse
Gratitudedoing charity work
Surprisedriving aimlessly, exploring new neighborhoods
Confidenceexercising, yoga, dancing
Satisfactionsharing a meal with interesting people, sleeping
Inspirationreading, visiting free galleries, listening to music
Lovecatching up with people who care about you

None of these activities is costly, but I guarantee you that they can work just as well in brightening up your day as anything you could possibly buy.

The goal is not to deprive yourself in the name of saving a dollar, but to find means to make you content, so you no longer feel compelled to engage in retail therapy.

It’s also about finding and maintaining a delicate balance between penny pinching and overindulgence, and maximizing happiness by dishing out the fewest dollars possible.

Advice #2:

During my weaker moments of craving pretty things (Korean beauty products and colorful stationery are my vices), I remind myself that nothing I buy could possibly make me feel as good as having money in a bank account.

By simply framing the purchase as something that subtracts (from my bank account) rather than adds (to my collection of crap), I’m able to take a step back, evaluate the bigger financial picture and (usually) make the right decision of abandoning the shopping cart.

You might find it helpful to set up a reminder of some kind to combat those thoughts of “I deserve this!” and “I NEED that” while browsing your favorite online retailer. A Post-it note on your laptop would do.

Remedying old habits is a gradual process, but luckily, you’ve got time on your side.

Advice #3:

Ask yourself 3 questions before every non-essential purchase:

  1. Do I absolutely need it?
  2. Will it be effective in solving my problem? / Does it look good on me (or whoever the recipient is)?
  3. Is it a good deal?

Only when the answers to all 3 questions are yes’s should you go ahead and make the purchase.

Have a Saving Plan

Ok, here’s where things get interesting.

To retire with a million dollars, you need to set aside $12,648.02 a year, or $1,054 a month.

I know. I know. $12,648.02 is not a small chunk of change. If you make $50,000 a year, that’s more than 25% of your before-tax income.

But it’s also not an astronomical amount of money to save either, juxtaposed to our end goal of a million dollars. You just need a concrete plan to get there.

To be clear, your saving plan is to be enacted in Year 4 of the roadmap, after you pay off debts and have an emergency fund in place, but it doesn’t hurt to start thinking about it sooner rather than later.

You could approach it like this:

Step #1: Write down how much you take home each month (after deductions).

Step #2: Create a rough monthly budget. It doesn’t have to be perfect.

Step #3: Figure out how much you can realistically save each month based on your budget.

If it turns out that you can easily save $1,054 per month. Great! Go ahead and do that! You can skip to Step #7.

If not, follow these steps below:

Step #4: Identify additional expenses you can slash from your budget without jeopardizing your health and life’s basics.

But what if you can’t save $1,054 a month even after cutting your budget down to the bare bones?

Don’t despair. Your current level of income doesn’t have to be permanent.

Step #5: Draft a plan to increase your future income, whether it’s through getting a promotion at work or starting a side hustle (and yes, entrepreneurial side hustles are a fine choice in this case), and save whatever amount you can in the meanwhile.

Step #6: As your salary rises, you will be able to throw those extra earnings into your savings, as long as you don’t succumb to lifestyle inflation.

Step #7: Set up recurring automatic deposits, so a fixed percentage of your paycheque goes directly to a retirement account.

You can’t spend money you don’t see, right?

Step #8: Every money windfall (including tax refunds) goes directly into your retirement fund.

Learn the Basics of Investing

The magic of this whole exercise begins with debt payoff (Year 1 and 2) and building an emergency fund (Year 3), but it really shines once you start investing in Year 4.

Check out these projection figures:

By the end of this journey, you will have accumulated $1,000,000. Out of that amount, only 40% will actually come from you. The rest is all investment earnings.

32 Year Compounding Results

Yup, you will have earned $595,263.51 from investments, with both eyes closed.

This is possible because of compound interest, which is basically earning interest on interest. Some call it the 8th wonder of the world. I call it a catalyst of capital growth.

Don’t worry if you’re not quite sure what investing entails yet, or feel intimidated by the idea of investing, or believe that it’s only for people with finance degrees.

We’ve all been there.

The reality is, investing is a lot less complicated, stressful, and time-consuming than you think. Promise!

Besides, you have about 3 years to familiarize yourself with investing basics before you actually start investing, so I’d say you have nothing to worry about.

Resources for learning about investing:

Note-taking is highly encouraged.


Build an Emergency Fund

Year 3 is entirely dedicated to building an emergency fund.

What is an emergency fund?

Money that is set aside for emergencies.

Why do you need an emergency fund?

To give yourself a big enough financial cushion to withstand life’s nasty surprises and avoid taking on debts.

I like to think of an emergency fund as an extra layer of foundation for your financial house, so it doesn’t collapse like a house of cards the minute a crisis knocks on the door.

How much do you need to save in your emergency fund?

Enough money that you can live off of for 3 to 6 months.

Some prefer to have 6 to 9 months’ worth of expenses saved up in their emergency fund, and I certainly wouldn’t blame them.

Regardless, save as much as you can in Year 3, and top it up later if a larger emergency fund helps you sleep better at night.

Where should you store your emergency fund?

You can’t go wrong with a high-interest savings account. That way, your emergency fund makes money when it’s not needed, but readily available when a crisis calls.

YEAR 4 to Year 35

Save and Invest $12,648.02 Per Year

With debt out of the way, and in its place, a saving plan, an emergency fund, frugal habits, and abundant investing knowledge, you are now officially ready to invest.

This is the last (albeit long) step towards becoming a millionaire retiree. Hooray!

If you’re following this roadmap to a tee – you spent the first 2 years clearing out debts and the following one saving a substantial emergency fund – you need to add $12,648.02 to your investment accounts each year for the next 32 years.

In case you’re not totally convinced about the maths, I got receipts:

32 Year Compounding Breakdown Year by Year

Let’s say it only took you one year to pay off your debts, then you have 33 years to reach the million-dollar goal, and the amount you need to save and invest each year lowers to $11,895.28.

If you had zero debts to begin with, then $11,195.67 is your yearly goal for the next 34 years.

As crazy as it might sound right now, I’m confident that you will be fully capable of saving the necessary amount by Year 4.

Regarding investing, your one and only objective is to ensure that your investment portfolio grows 5% a year. And this is 100% doable for anyone with a moderate level of investing knowledge.

Take the stock market, for example. The historical return is 10% annually.

Even factoring in market volatility, you have a decent chance at getting an average return of 5% or more per year, as long as you invest with a long-term view and keep chugging along even when the market is down.

There are 2 main ways to invest in the stock market:

  1. You can invest passively through a robo-advisor that will automate all aspects of investing for you. You have to pay an annual management fee to enlist this service, but you will be completely hands-off. Robo-advisors’ collective motto is, “In Algorithm We Trust” (I totally made it up).
  2. Or, if you’re confident about your investing prowess, you may choose to do self-directed investing (also called DIY investing) and pick what to invest in.

If you pick the DIY route, here are your investing options (in order of ascending difficulty):

  • Index funds: a type of mutual fund designed to mimic the components and performance of a financial market index (such as the S&P 500)
  • ETFs: ETFs are baskets of securities (ex: stocks, bonds) that are traded on exchanges like individual stocks
  • Dividend stocks: stocks (usually of well-established companies) that issue dividends to their shareholders on the regular
  • Individual stocks: self-explanatory

Each of these options has its pros and cons, but all of them have the potential to return 5% or more a year, so you’re better off picking a strategy that you’re most comfortable with.

Onward and Forward

Turning the big 3-0 is a huge deal, and you might feel financially behind at the moment, but trust me, you still got plenty of time to course-correct and retire rich, as long as you follow the steps laid out in this article and turn motivation into actions.

Let’s recap:

Road Map

Retiring with a million dollars is not only possible but extremely probable. Good luck!

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Category: Money For ProsRetirement


  1. There is another factor in your favor starting fairly early, like thirty. When I first got a 401K the contribution limits were $7,000 a year for an employee. Now they are $19,500. So someone starting now has a huge advantage in terms of the amount they can contribute to a tax advantaged plan. And if history is a guide that limit might be over $50,000 by the time today’s 30 year old retires and if they are fortunate to control lifestyle inflation and see some real compensation increases along the way I think they not only will be millionaires but most likely multimillionaires. Great post, I didn’t have a 401K option early in my career but I jumped in with both feet as soon as I was able. As you’ve shown what you do now can really make a big difference in the future. I’m a 401K millionaire and I did that back in the days where I was only allowed to contribute $7,000 to the plan. I know you’re in the Canadian system but the logic is about the same, and someone contributing $12,648 now is going to do even better than I did!

    1. Love this. It’s easy to feel like you’ve missed the compounding interest window once you hit your thirties. You laid this out in a way that’s easy to follow and inspires hope to those of us who know we’ve waited a little too long!

  2. “Pick one hobby or self-care routine that you can’t do without, and give yourself a small allowance for indulging it (say, $50/month)”

    I love that you allow for that in your budget so clearly. It’s so easy to get wiped out trying to pay down debts. Way to help people towards balance from the get go!!

    1. Thank you for pointing that out. Paying off debts is important, but maintaining physical and emotional well-being should always be priority #1. 🙂

  3. This is a fantastic post! I love the level of detail. One thing that really works for me to curb impulse spending is that I have a rule that I do not buy anything on first sight. So if I’m browsing, online or in-person, and I see something I feel like I just NEED, I force myself to sleep on it. If I still feel like I can’t live without it after a day or two, I’ll figure out if my budget allows for the purchase. But the vast majority of the time, I realize I don’t really need it.

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Article by: Flora Pang

Flora Pang aspires to become someone who plants trees in their spare time, writes thank-you notes to strangers, and serves in UN peacekeeping operations around the world. But to date, blogging about personal finance remains her only contribution to society. You can catch her rambling about money on Facebook, Twitter, Instagram, and (to a lesser extent) Pinterest.