‘Robbing you of your financial freedom’: This self-made millionaire shares his 5 steps for what to do (and what not to do) to become the first millionaire in your family

The first steps explained

Just as a smart business owner takes an inventory of assets and liabilities, the wannabe millionaire needs to drill down on their income and bills, Tilbury contends. For his first step, he recommends pulling three to six months of bank statements to get the clearest sense of how you spend your money, breaking down expenses into “needs” and “wants.”

The idea isn’t to shame or deprive yourself but to limit your wants to a fixed percentage of your paycheck; Tilbury suggests 25%. “Believe it or not, this is one of the hardest things for people,” he says. Well, believe it and take note: “These little pleasures are robbing you of your financial freedom.”

That’s putting it mildly. A 2019 survey commissioned by online insurance provider Ladder and conducted by OnePoll found that the average American spends $1,497 per month on non-essential items, which adds up to roughly $18,000 a year.

Step two involves using another 20% of your paycheck to create an emergency fund that covers at least three months’ expenses. “Life isn’t smooth sailing and at some point, an emergency will come your way,” Tilbury says. And it’s important to be ready for that. Sadly, just 54% of adults had three months of emergency savings in 2023, down from 59% in 2021, according to the Federal Reserve.

Step three? Pay down high-interest credit card debt, a move he describes as the one way to get a guaranteed return on your money. As of May, the Fed pegged the average credit card interest rate at 21.51%. Paying off a $10,000 balance at $300 a month at that rate would take four and a half years and cost $5,367.24 in interest; now double the monthly payment and you’re talking just under $2,000 interest and a zero balance within one year and eight months.

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The final steps

Steps four and five involve investing, largely made possible by getting rid of nasty debt. Stressing that he’s not offering financial advice, Tilbury highlights a popular strategy: using an index fund tied to the S&P 500 to fund a Roth IRA. A Roth uses after-tax dollars, so there’s no need to pay taxes when you tap the fund in retirement.

Tilbury also recommends using 5% of a paycheck for “high-risk, high-reward” plays. He puts money into cryptocurrencies such as bitcoin and Ethereum. He’s also a big fan of side hustles, which he recommends as a way of finding more money to invest and offset expenses.

Not all of this adds up, literally. Tilbury introduces his video with a skewed example of discretionary spending as he cites the combined expenses of “coffee on the way to work," a food truck lunch, sweet treat, commuting, and subscriptions. The daily total comes to $27.40, which he extrapolates to $10,000 a year.

There’s just one problem: His hypothetical work routine best applies to five days a week, not seven. When you add the 11 U.S. federal holidays, the total drops to 261 working days for 2024. So unless you’re seeking out a food truck and the bus to work on days off, you’d spend just shy of $6,900 annually, not $10,000 — a difference of more than 30%

Still, Tilbury posits an irrefutable larger truth: The surest way for a working middle-class Americans to become a millionaire is to create an emergency fund, eradicate high-interest debt, invest simply in tax-advantaged ways and allocate a small slice of money to riskier plays with potentially high payoffs. It’s a formula, you might say, for anyone who wants to be a millionaire.