3 Things to Do in Your 20s to Become a Millionaire in Your 60s

There are 5.3 million millionaires living in the U.S. And all told, millionaires make up about 2% of the total U.S. population.

Clearly, that's a pretty small percentage. But that doesn't mean you can't be a part of it.

If that's your goal, though, then you should know that the moves you do and don't make in your 20s could spell the difference between becoming a millionaire or not. If you're eager to reach millionaire status, here are some key things to focus on in your 20s.

1. Learn to not spend your entire paycheck

Your 20s are generally the period of life when you first start to earn a steady income. And that's an exciting thing. It means you can finally pay your essential bills without having to go to your parents for help or fall back on credit cards. And it also means you might even have money left over for fun stuff -- things like concerts and travel.

But if your goal is to become a millionaire eventually, then you'll need to get into the habit of not spending your paycheck in its entirety. And the sooner you do, the easier it will be to uphold that practice.

In fact, one thing you may want to do is set up automatic transfers each month to a brokerage account, IRA, or 401(k) plan. That way, you'll have money leaving your checking account you won't be tempted to spend.

2. Steer clear of needless debt

You may have to borrow money in the form of a mortgage loan to finance a home purchase. And similarly, you might have to sign an auto loan if you need a car and can't afford to buy one outright. These are reasonable debts to take on, because you need a roof over your head and a means of reliable transportation.

But there's a big difference between signing a mortgage or auto loan and racking up a credit card balance for things like vacations and leisure. Of course, some people end up with credit card debt not due to frivolous spending, but due to things like unplanned car repairs or medical bills.

The point, however, is that if you're able to avoid credit card debt, you won't lose money to the interest these cards are known to charge. And that gives you more cash to invest.

3. Put your money into the stock market

Many people think that investing in stocks is risky. And the reality is that you do take on some risk when you put money into the stock market. But if your goal is to grow a large amount of wealth over time, then consistently investing in stocks is the way to go. And if you make a point to diversify your portfolio, you can help minimize your risk of losses along the way.

Over the past 50 years, the stock market has delivered an average annual 10% return before inflation, as measured by the performance of the S&P 500 index. So, let's say you begin investing $300 a month in stocks during your 20s, and you continue doing so until your mid-60s so that all told, you've given yourself a 40-year investing window. If your portfolio returns an average annual 8%, you'll end up with almost $1.6 million.

You may prefer that your 20s be laid-back and carefree. While there's nothing wrong with enjoying your 20s, you can't simply ignore your personal finances if your goal is to become a millionaire. Instead, make a point to manage your income savvily, avoid debt, and invest from a young age. If you make that effort, then you, too, might one day join the ranks of the small but notable percentage of Americans who get to call themselves millionaires.