Personal Finance Expert Shares the Top Rule for Achieving Millionaire Status.

According to a Fox Business article, personal finance expert and "The Ramsey Show" co-host Rachel Cruze identifies the No. 1 rule towards becoming a millionaire as consistently investing in your company's 401(k) plan early on – without touching it – and taking advantage of a Roth IRA plan, if offered.

Cruze emphasizes that this is a long-term mindset, acknowledging the concerns of younger generations who may view retirement savings as distant and less pressing than immediate financial needs. She also advises maximizing employer 401(k) matches, utilizing Roth IRAs for tax advantages, and avoiding withdrawing money during market dips. Additionally, she suggests becoming debt-free, establishing an emergency fund (3-6 months of expenses), and allocating 15% of income towards retirement savings.

Investopedia further supports the importance of early and consistent saving and investing, highlighting the power of compounding interest. Their article details a plan where saving $500 a month in an IRA from age 20, with a 7% return, could result in over $1.32 million by age 57. They also stress the importance of avoiding unnecessary spending and debt, increasing income, and resisting lifestyle inflation. The article also covers maximizing retirement contributions through 401(k)s, traditional and Roth IRAs, SEP, and SIMPLE IRAs.

Dave Ramsey, in a separate article, reinforces the idea that wealth is rarely inherited, emphasizing instead the importance of consistent, conservative investing in strategies one understands well, such as growth stock mutual funds and real estate purchased with cash. He outlines his "7 Baby Steps" to financial success, which include building an emergency fund, paying off debt, establishing a larger emergency fund, investing 15% of income in retirement, saving for children's college, paying off the mortgage, and finally, growing wealth and giving generously.

The Express article highlights the increasing number of "ISA millionaires" in the UK, emphasizing the benefits of maximizing annual ISA allowances and consistently investing in diversified stocks and shares ISAs for higher returns compared to cash ISAs. They also suggest a "20% rule," where 20% of income is allocated to investments. The article uses an example of a 25-year-old contributing £10,500 annually with a 5% return reaching millionaire status in 40 years.

In summary, while specific vehicles and strategies may vary, the core principle across all sources is the importance of early, consistent saving and investing, coupled with responsible spending habits and a long-term perspective.