Becoming a millionaire doesn’t exactly put you in the “super-rich” category like it used to. But building $1 million in wealth is still an impressive goal, especially if you’re an average, middle-income earner.
Hitting that seven-figure mark as a 9-to-5 employee may seem unattainable, but as personal finance expert Austin Williams explains, it’s actually more common than you might think. Many middle-class Americans have figured out how to build wealth over time without CEO salaries or massive inheritances.
Frugal living habits of ‘quiet millionaires’
Williams calls middle-class folks with a net worth of at least $1 million “quiet millionaires” because, most of the time, you’d never know they had that kind of financial cushion. They’re not successful business owners, earning huge salaries or rolling in family dough—and they generally don’t look like millionaires.
In a YouTube video, Williams breaks down 10 frugal habits of “middle-class millionaires.” Those habits can essentially be grouped into three categories—lifestyle, cash flow management, and investing—with one bonus habit that applies to anyone who wants to make smart financial decisions.
Lifestyle habits of middle-class millionaires
If you think building wealth is all about having a particular lifestyle, you’re right—but perhaps not in the way you’re imagining.
Not looking rich
“The reason why middle-class millionaires often go overlooked is because they don’t have any visual indicators of their wealth,” Williams said. “They wear modest clothing, live in modest houses, and drive modest cars.”
It’s hard to become a millionaire on an average income if you’re spending your money on pricey items. Instead of buying expensive things to look wealthy, middle-class millionaires live modestly, saving and investing their money to build more wealth over time.
Driving an affordable, reliable car
Cars are one of the biggest expenses for American households, and if you don’t choose wisely, they can eat up more of your hard-earned income than you might expect.
“High recurring expenses and high-maintenance cars are the number one wealth kill that holds so many people back financially,” Williams said. Middle-class millionaires choose affordable, reliable cars to minimize those expenses.
Living below your means
There are essentially two ways to build wealth: Increase your income or decrease your expenses. Williams compares those approaches to playing offense and defense, and middle-class millionaires excel at playing defense.
Living below your means means making the most of your money and ensuring your expenses are always less than your income. That way, you’ll always have extra money to save or invest.
Cash flow habits that help average earners become millionaires
How you handle the money you do have makes a big difference in how much wealth you’re able to build.
Pay yourself first
Middle-class millionaires know that saving comes before spending. That’s hard to do if you’re living paycheck to paycheck, of course, but if you can cover your necessary expenses and still have money left over, that money should be set aside before anything else gets paid.
Avoid debt
Part of living within your means is avoiding debt. Middle-class millionaires might use credit cards, but they pay off the balance every month so they never pay interest. For large purchases, they try to save up beforehand instead of borrowing money whenever possible.
“They understand that debt keeps you behind financially, inflates the price of everything because of high interest rates, and makes it harder to build wealth,” Williams explained.
Taking advantage of every benefit an employer offers
Middle-class millionaires are usually employed by someone else, and maximizing their workplace benefits often means getting free money. Literally. But it’s not just retirement account matches that these wealth-builders take advantage of.
“They choose to match their 401(k) contribution, get good insurance to avoid high medical bills, contribute to their HSA, and take their vacation to get mental rest because they understand that these have financial benefits,” Williams said.
Investment strategies of middle-class millionaires
How you invest your extra income makes a difference:
Invest outside of a 401(k)
A 401(k) with an employer match is a great employee benefit, but middle-class millionaires don’t rely on it alone for retirement.
“They understand that in order to reach a million dollars of wealth you can’t just stick to a 401(k) plan, and they search for other avenues and other opportunities in which they can invest in to build and grow their wealth over time,” Williams explained. That means investing in Roth IRAs, brokerage accounts, and similar investment accounts.
Take ownership of investment plans
While it may seem easier to let someone else manage your investments, it’s important to stay involved and understand how they work.
“They understand that the person who cares the most about your money is you, and so they choose to take ownership over their investments and educate themselves on creating the best financial plan for them,” said Williams.
Practice patience
Building wealth is a long game, Williams explains, and it requires patiently waiting for your investments and smart financial decisions to pay off:
“The reality of middle-class millionaires that many people don’t want to hear is that they are not people in their 20s or 30s, but they are people in their 50s and 60s. And that is because they don’t just come into their wealth very quickly, like a successful entrepreneur does. No, they get their wealth by consistently making good financial decisions over a period of decades that ultimately add up to something much bigger once they reach old age.”
The universal habit everyone should practice
The final habit Williams shares is one that just about everyone can benefit from, regardless of their wealth.
Practice contentment
Constantly wanting more sometimes feels like the American way, but wanting less is a much quicker path to a happy life. Beyond that, contentment also helps you make the financial decisions that lead to greater financial freedom over time.
“Pretty much anybody can become a middle-class millionaire just by making good financial decisions over a long period of time,” said Williams. “And I think the key to making good financial decisions over a long period of time is simply practicing contentment, not wanting more, and being happy with what you have. If you practice contentment in your life instead of always wanting more, you will open up a lot more money to build your wealth over time.”
