Wondering how to make a million pounds?
The most realistic way that anyone can become a millionaire is to invest as much as you can afford every month, consistently over many years.
For example, if you can afford to invest £500 a month, and you make a 10% return on your investment, you will make a million pounds in around 29 years.
How to become a millionaire UK
There’s more than one route to becoming a millionaire. Let’s take a deeper dive into how to make 1 million pounds.
It’s not easy to become a millionaire. But that doesn’t mean it’s impossible.
What if I told you that anyone, even someone with zero investment capital and no rich parents, can become a millionaire? It sounds crazy, but it’s true!
Most people believe that becoming rich is some kind of magic trick or pure luck. In fact, it takes hard work and smart decisions. If you want to get rich, you have to do the right things at the right time in your life (and yes – good luck does help, but you can also make your own luck).
If you want to make a million pounds from nothing, the key is starting small and investing your time instead of your money.
Let’s look at how you can (realistically!) make a million pounds.
How to make a million pounds overnight
Oh, so you want the easy route, do you? Well, sorry to tell you, but if it was that easy to make a million pounds overnight, we’d all be millionaires!
The only truly likely ways to make a million pounds from nothing overnight are by inheriting the money, or winning the lottery or a competition.
How to make a million pounds from inheriting money
If you have rich parents or grandparents, perhaps inheriting money is how you’ll make your million. Of course, if you have a good relationship with your family then it’s not particularly nice to think about, but it would be an easy way to get rich!
The problem with this method, of course, is that not everyone has wealthy relatives. Even if you do, sometimes they’ll give money away first before giving it to you (probably because they’re hoping to pass on their wealth and avoid inheritance tax). And the money may be split between multiple family members or causes in the will. And of course, you don’t know exactly when your inheritance is likely to arrive.
Overall, not a situation to rely on if you want to become a millionaire.
How to win a million pounds
Another fairly unlikely way to become a millionaire is by winning the lottery or a competition. Your chances are pretty low: there are millions of people playing the lottery every week. The odds of winning the jackpot in the UK Lotto are around 1 : 45,057,474!
The plus side is that lottery winnings are tax free in the UK! Although there are additional tax implications, such as income tax on the interest once you’ve banked it.
If money is all that matters to you, then winning a competition or the lottery might be tempting but it’s not likely to occur. The odds are against you!
If you’re serious about earning a million pounds, don’t leave it to fate. Let’s look at some more realistic ways to hit that mill.
The sure fire way to make a million from nothing: invest your way to a million pounds
The most realistic way to make a million pounds is by investing. If you know where to invest and can learn how to get the best returns, then it’s possible to make a million pounds from (almost) nothing.
Investing is the best way to make sure your money grows over time. If you just leave your money in the bank, it will actually decrease in value over time, because of inflation (the cost of living goes up).
Active investing
When most people think of investing, they think of buying shares in individual companies. This is called stock picking, or active investing.
If done correctly, this can be a relatively quick way to make money. And if you invest in the right stocks at the right time, you can make a lot of money.
For example, if you were lucky enough to have invested just £1,000 in Apple in 1980, when it first listed on the stock market at $22 per share, then your investment would be worth hundreds of thousands today. Investors hit the jackpot quickly with Apple’s rise to prominence. If you invested in Microsoft or Amazon at a similar time, your investment would have made you a multimillionaire!
However, stock picking takes a lot of knowledge and research, and also a hefty dose of luck. Some would say it’s not much different from gambling (at least for the uninformed investor).
Luckily, there’s a more accessible and reliable way that anyone can start investing. It’s called passive investing, which usually takes the form of investing in index funds.
Passive investing
What are index funds?
Index funds are a way to invest in the stock market without having to pick your own stocks. Instead, you buy shares in an index fund that tracks the performance of a particular category of company.
For example, there is an index fund for FTSE 100 (which is essentially the 100 biggest companies on the London Stock Exchange). There are even global index funds, which let you buy a piece of hundreds of companies around the world.
The idea is that you can invest in all of the biggest companies or a combination of them in one go. You don’t have to research and choose individual companies.
And there’s much less risk. If you only own shares in one company and it goes bust, you’re out of luck. But if you invest in an index fund, your profit (or loss) will follow the general market trends – which historically always goes up in the long run (although of course it can dip in the short term).
Done correctly, anyone can eventually make a million pounds by investing this way. You just have to be consistent in investing over time.
How much you need to invest monthly to become a millionaire
So now you’re probably wondering how much you need to invest to become a millionaire. Well, that depends on a few factors: the market return, how much you have available to invest, and how long you want to wait to become a millionaire.
The easiest way is to start young! Or as they say, the best time to start was yesterday. The second best time is today.
For example, let’s just take an example average stock market return of 7%.
If you have a newborn baby and you invest just £50 a month for them (and they continue this investment throughout their life), they would be able to retire a millionaire by the time they’re 70 – all from just £50 a month.
If you have £1000 a month spare to invest, you’ll become a millionaire in approximately 28 years.
There are lots of different investment calculators online like this one where you can play around with the figures.
Now, these are just examples, and the value of your investments could go up or down.
Of course, ideally you would invest extra when you can – after a pay rise, bonus or other windfall. So you could potentially reach 1 million much quicker.
Still, if you’re impatient like me, it might seem like it will take a crazy amount of time to reach your goal.
But that time is going to pass anyway – wouldn’t you rather have a million pounds at the end of it?
One of my favourite sayings is this:
A year from now you’ll wish you started today.
Now get started!
Earn extra money
Wondering where to find that extra £1000 per month to invest? It’s easier than you think!
You can find extra money to invest either by cutting money from your budget, or by making more money. Personally I favour making more money. The possibilities are limitless, and it’s much more fun.
Here are some of my personal favourite ways to make more money:
Matched betting
Matched betting is a surefire way to make money as long as you’re comfortable with using betting sites (but no – it’s NOT gambling!).
Matched betting is a way of exploiting the free bets and promotions all the bookies hand out to entice new customers. You place two ‘matched’ bets on two different sites, to cover all outcomes. That way you don’t lose money on the actual bet – and you get to pocket the money from the free bet.
There are calculators, trackers and other tools online that will hold your hand through the process and tell you exactly what to bet on. I’m a member of this site and I recommend it for beginners. It has excellent step-by-step videos and guides, as well as top notch customer support.
Some people make £1000 a month through matched betting alone, but a more realistic goal is perhaps £200-£500, depending on how much spare time you have.
Blogging
I also recommend starting a blog as a fantastic way to make extra income.
The thing with blogging is that it takes a lot of work up front before you start to see an income. Be prepared to work for a year or so before you start to see the returns. But eventually, a blog can turn into a source of passive income that works for you even when you’re taking a break.
The amount of money you can make depends loosely on how much traffic it gets. If you’re one of the top bloggers in your field, it more than possible to make a full-time living from your blog!
You don’t need to be an expert or professional writer to start a website or blog. All that’s required is time and commitment.
Freelancing
We all have some unique skills, whether it’s something you’ve trained on in your day job, or something you’ve picked up through a hobby. Nowadays it’s easier than ever to exchange your skills for money.
There are dozens of online platforms where you can start offering these services to people – often on a sliding scale. For example, you might want to offer your freelance services for £30 an hour.
Simply create an account on a site such as Freelancer or People Per Hour and then search for jobs that suit you. There’s lots of work available so if you have a skill or service to offer, then you can certainly make money from it.
Here are some examples of skills that you can sell as a freelancer:
- Writing
- Coding
- Graphic design
- Photography
- Web development and design
- Transcription
- Video editing
- Translation
You don’t necessarily need to have professional training or years of experience. All that’s required is a portfolio of your work, and for you to be able to show potential customers how you’ll get the job done.
Online tutoring
If you’re an expert in your subject, then you could consider tutoring online. Whether you’re teaching your degree subject to A level students, teaching art to children, or giving singing lessons, you can teach almost anything online now.
If you’re a fluent English speaker, one popular option is providing English conversation practise to students in other countries. A bonus is that thanks to the time difference, you can find shifts that work around your normal job.
Again, there are a number of different platforms available to connect customers with tutors in pretty much any subject or field. If it’s something you’d be interested in doing – and if it’s something that others would find helpful – then why not give it a go.
Cut costs
In addition to making extra money, it makes sense to take a good hard look at your budget and trim the fat. There’s no point just wasting money on a gym membership you never use, when that money could be working for you in your investment account!
So, make a list of all your bills and expenses. Then look to see where you can save money without affecting your lifestyle.
You could consider: cutting back on fast food/ready meals, eating out less (and cooking more at home), cancelling paid TV packages and instead watching free streaming services, switching your electricity supplier, or cancelling other services you’re no longer using.
Be sure to review the direct debits in your online banking and you may find a few surprises!
However much you manage to save a month – whether that’s £50 or £500 – remember to channel that money into your investment account, to help you on your journey to making a million pounds.
Watch lifestyle inflation
As you start to earn more, it’s tempting to start spending more. Bigger house, faster car, fancier holidays.
But if you let your lifestyle costs creep up, you’ll never find the extra cash to invest.
Remember the end goal here – investing your money until you make a million pounds. If you spend 100% of your income every month, you’ll still feel poor at the end of it.
So, as tempting as it might be, try not to let your lifestyle creep up in line with your income.
As Thomas J. Stanley explains in his famous book The Millionaire Next Door, most millionaires don’t live the stereotypical ‘millionaire lifestyle‘ that many people think they do.
They don’t live in big houses, drive luxury cars or wear designer clothes. Instead, they’re generally pretty frugal – making a point of turning off lights when they leave the room, only taking one trip abroad per year and buying clothes from discount stores like Primark.
They recognise that their money is better off in investment accounts than wasted on status symbols.
Choose the right career/degree
Of course, the thing that has the biggest impact on your income is what you do for a living. So choose wisely!
If you pick a very high paid career, then over the course of your working life, that will make a big difference. More money in your pay cheque means more money to invest – as long as you don’t let that lifestyle inflation creep in, of course.
Here are some of the highest paying jobs in the UK:
- Plastic surgeon (average salary: £90,531 per year)
- Accountant (£65,000 per year)
- Financial advisor (£60,000 per year)
- Aircraft pilot (£62,000 per year)
- Sales manager (£57,717 per year)
- IT risk analyst (£56,585 per year)
- Auditor (£54,500 per year)
- Cardiologist (£51,913 per year)
Make sure you’re being paid your worth
Whatever job you’re in, you most likely have opportunities to maximise your earnings.
Make sure you’re asking for a pay rise when the opportunity comes up. In many industries, the most effective way to get a serious pay bump is by moving company.
It’s worth doing your homework and seeing which companies are offering the highest salaries for the job. Check on Glassdoor and speak to a recruitment professional too.
Similarly, if you’re not making enough money to achieve your goals (whether that’s investing or simply living more comfortably) then it might be time to look for a new career altogether.
And remember the golden rule: if you want to be a millionaire, each time you get a pay rise, invest all that extra money into your index fund!
Maximise your workplace pension
Want free money? Your workplace is probably giving it out… in the form of pension contributions. Take advantage of it!
Many employers make contributions to your pension. Some workplaces will match your contribution, up to a certain amount. This is literally money for nothing. The catch is just that you can’t access it until pension age. So you need to find out if your job offers something like this, and make the most of it.
Every time you get a pay rise, make sure you mention to your boss that you’d like them to increase the percentage of your wage being paid into the company pension scheme.
Building up your pension pot when you’re young means you’re more likely to have that million to spend in retirement!
Start a business
Looking for a quicker route to one million pounds? Then consider starting your own business.
Business owners and entrepreneurs are among the highest paid people in the UK, and there’s also the chance that you could sell your business for a million pound payday!
(Selling a business is the most realistic way to ‘become a millionaire overnight’ – but of course, it will take a lot more than a night to build your business up to this level.)
You might be thinking to yourself ‘that won’t apply to me because I’m not the entrepreneurial type’. The truth is that starting a business doesn’t have to be about owning a huge company. You can make money by selling things on eBay, running an online shop, offering services like web design or even writing eBooks.
For example, Sophia Amoruso, the founder of Nasty Gal clothing, started her business by single-handedly selling vintage clothes on eBay from her bedroom. She grew to a net worth of $280 million – until the company went bankrupt in 2016, but that’s another story.
How to make a million pounds: conclusion
The sure fire way to make a million pounds is by investing. If you know where to invest and can learn how to get the best returns, then it’s possible for anyone with some capital (even if they have no rich relatives) to become a millionaire!
The most realistic ways to become a millionaire are through investing in passive index funds, or starting your own business.
All of these methods require research, consistency and hard work. But they’re much more accessible than winning the lottery or becoming an instant millionaire from inheriting money.
It might not be the glamorous answer you were hoping for, but regular and consistent investing is the most realistic and achievable way to make a million pounds.
