Without knowing it, you may live next door to one. Or have one among your Facebook friends. And with the right strategy, you could become a millionaire, too.
What, exactly, does it take to become a millionaire? If you're like me, you may envision Scrooge McDuck swimming the backstroke across a sea of gold coins, the spoils of a charmed life. The reality, however, is that most millionaires have built their wealth through scrappy perseverance and a diverse portfolio.
Millionaires are defined in different ways. RBC Wealth Management and consulting firm Capgemini who produce the World Wealth Report say it is someone who has $1 million or more in investible assets -- not including items like your primary home or consumable goods you own. On the other hand, international mega-bank Credit Suisse defines it as someone with a net worth of at least $1 million. This net worth could include the value of your primary residence, money that's been invested in real estate or trust funds (known as non-liquid assets), and cash, stocks or bonds (liquid assets) [source: Frank, Stern].
If you'd like to see how close you are to becoming a millionaire, figure your own net worth by adding the value of your assets: your home, its furnishings, your cars, bank accounts and investments. After you have a sum total, subtract your liabilities, which include the balance of your mortgage and car loans, credit card balances and other outstanding debts. What's left is your net worth. (Try this online calculator to simplify the math.)
Not a millionaire yet? Don't get discouraged. This level of wealth is attainable within a lifetime. By making smart financial decisions and following a road map that includes a few key strategies, it's entirely possible to become a millionaire. It also means you'll need to live beneath your means, which is a far cry from the millionaire lifestyle many of us have become conditioned to expect.