Here's my 2 cents on how I got to the $3 million mark. It's definitely a get rich slow plan.
1. Max out your retirement accounts. I've done it every month since I've been working-- which is now 30 years. 401k's and IRA's both.
2. Buy rental property with a long-term view. I'm not a flipper.
My rule has been if I can have neutral (or even a small negative) cash flow on a 15 year mortgage, it's generally a good deal. This goes against the grain for most of the experts that demand great positive income every month, but it's worked for me. I have 100% equity in several properties that didn't generate positive cash flow until the last few years of the life of the mortgage. Having tenants pay the mortgage is a beautiful thing, and now that the properties are paid off, it's all positive cash flow.
This strategy certainly works best when you have reliable long-term tenants. You don't want to be swapping tenants every year so that you're stuck empty property for months at a time. I've been pretty lucky on this score.
Stay with higher-end rentals to get a higher-end renter. Doesn't always work out that way, but your odds are better.
3. Use Quicken (or Mint or something like it). I've used Quicken since '98 and, without sounding overly dramatic, it simply has changed my life. Admittedly, I'm anal about it: I keep track of almost every dollar I spend in Quicken. It's become a habit, a daily routine like walking the dog, and something I that takes 2 minutes everyday. Some may say it's overkill, but I like the discipline and the organization it forces me to live by.
4. Buy dividend-producing individual stocks direct from the company and make up your own mini-mutual fund. Many companies have Dividend Reinvestment Plans where you can start with a moderate sum. This is probably the riskiest part of my portfolio, but the yields have become so good in this environment, that it dampens much of the risk.
I should add that I've made several bonehead decisions on this one over the years. I've owned several DRP's of Company's that are no longer with us, rendering my investment worthless. The important thing is to diversify like crazy.
I'm sure many will say to just stick with mutual funds, but I find the DRP's are a good education and a good motivator. Buy and Hold is a strategy shrinking from favor it seems. And my DRP strategy is a buy and hold plan in many ways, so it is a risky one, but it's worked amazingly well for me.
5. Practice bursts of extreme frugality. For example, for a 30 day period, try to eat and entertain yourselves on $200. Make it a seemingly impossible amount. The more daunting, the better. This includes groceries, dining out, entertainment and other discretionary purchases.
We've done this for random months here and there for the past few years, and it's not that big of deal. In fact, it's fun. You eat what's in the pantry or freezer. You catch up on free TV; go to parks you've never seen; take hikes you've never thought about; see $1 movies and skip the popcorn for a change. In my case, I read more, workout more and play the piano more when I'm on a frugality binge.
Take the money you save for the month and pay down your mortgage.
I find that going extreme for one month is more effective (and more fun) than trying a long-term budget. Plus, something about the asceticism during a month like this is very comforting.
I know it's a little weird, but try it sometime.
6. Obviously, stay out of credit card debt and auto loan debt. Don't let these guys have your money. Pay cash for everything, or go on a frugality binge and then buy the car or flat screen you've been wanting.
I know this is all basic stuff, but it really does work. Our household income is good, but not huge- under $200k. We've inherited nothing. We've done okay on our investments, but we've done it with singles, doubles and occasional triples. No home runs, and even a few strikeouts. But no Apples or Microsoft bonanzas, etc.
And we do have fun and spend money when we feel like it. We travel internationally and go on Aggie road trips when we feel like it. In other words, the sacrifices really do seem small, and I feel I've missed nothing even though we are pretty avid savers.
We weren't blessed with kids, so we know things are a lot more difficult for many.
The point is, getting to the multi-million dollar mark is possible for anyone with a decent income and a long-term horizon.
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