‘Focus on the first $100,000’: This self-made millionaire breaks down how you can make your net worth ‘go crazy’ — and hit the seven-figure mark in 2024

“Don’t worry about earning millions [at first],” he said in his video, paraphrasing a millionaire he’d admired in his youth. “Instead, focus on the first $100,000 because, after that, your net worth will go crazy.”

You might be thinking: reaching millionaire status in 2024 doesn’t have quite the same impact it did even one generation ago. After all, a cool million today would have been only worth slightly more than $565,000 back in 2000, according to a Federal Reserve inflation calculator.

However, having those seven figures in the bank today certainly doesn’t hurt — especially for retirees looking to enjoy a well-earned vacation or a student looking to pay off their loans faster.

In his video, which has netted more than $1.4 million views, Tilbury offers tips on how to grow your nest egg and reach that first million dollars.

Stick to a budget

The journey to millionaire status begins with a classic discipline: budgeting.

The budgeting process will make it clear where there’s waste and just how much money you can use to invest. Tilbury refers to budgets as “a guide to make more informed choices.”

First, figure out how much money you take home each month. Create a spreadsheet broken down into two main categories: necessities (rent, groceries, utilities) and flexible spending (electronics, vacations). Paint a clear picture of exactly how much money you can set aside and invest.

It doesn't mean it's all work and no play: there's still plenty of opportunity to indulge and have fun, even when squirreling money away. There are a variety of budgeting strategies available. Find the right one that suits your needs and lifestyle.

Once you have a budget in place, you can determine other ways for you to grow your money.

Invest in low-cost index funds

Befuddled beginners often hit two common obstacles: what to invest in and how to invest. Many of those mysteries can be resolved thanks to the ubiquity of index funds. The key is to avoid fads and let your money stay put so it can grow.

Tilbury gave the example of investing $250 a month in an S&P 500 Index fund and getting an average annual return of 7%. In 40 years, you’ll find yourself with $656,000. The impressive part, he said, is that $536,000 of this is from compound interest.

That means, you only have to put in $120,000 of your own money. He adds that, once you hit that $100,000 mark, “compound interest stops being lame” and “once you get to this point, it’s almost inevitable that you’ll be wealthy if you just invest in a low-cost index fund.”

These types of funds peg their financial performance to an index — hence the name. They also offer instant stock diversification, low costs and little to no maintenance.

Smart tax management

With managing your taxes, you often get what you pay for. There’s a big difference between doing it yourself with a software program versus hiring an eagle-eyed (and potentially pricey) professional who learns your situation and knows the tax code cold.

However, think of hiring a professional as another investment: chartered professional accountants earn their keep in finding you lucrative (and legal) deductions or devising a tax-effective financial strategy.

Speaking of deductions, independent contractors can claim lots of them — from computers and smartphones to the square footage in your home you use as an office. And less in taxes equals more to invest.