When it comes to building real, lasting wealth, the journey might seem overwhelming—especially with all the financial jargon out there. From stock market trends to complex investing formulas, it’s easy to feel lost before you even begin. But becoming a millionaire doesn’t require a Ph.D. in finance or mastering complicated equations?
In fact, there are just four simple numbers. Focus on These 4 Numbers to Become a Millionaire . That’s right—four. These numbers are easy to track, simple to understand, and incredibly powerful when it comes to shaping your financial future. Whether you’re starting from scratch or already well on your way, keeping a close eye on these metrics can dramatically change the course of your wealth-building journey.
Personally, I’ve used these four numbers as my financial compass. I know them like the back of my hand, and they’ve guided every major financial decision I’ve made. Today, I’m going to share them with you—because if you can master these four areas, I genuinely believe you’ll be well on your way to hitting millionaire status sooner than you think.
And even if you’ve already crossed that million-dollar milestone, don’t tune out just yet. These numbers aren’t just about getting rich they help ensure you stay rich. Tracking them consistently will help you maintain and grow your wealth for the long term.
So let’s dive in—and get ready to transform the way you think about your money.
1. Your Savings Rate
The first number you need to get familiar with on your journey to becoming a millionaire is your savings rate. Simply put, it’s the percentage of your take-home income that you consistently put aside. Ideally, you should aim to save at least 10% to 20% of your take-home pay. That might sound like a lot at first but trust me, it’s one of the most powerful habits you can build.
Here’s the thing: most people in the U.S. save less than 5% of their income. That’s not nearly enough to build wealth over time—unless you happen to win the lottery, receive a massive inheritance, or land an insane company bonus. But for the rest of us, hitting that 10% to 20% savings rate can absolutely put you on the millionaire track. And the higher your rate, the faster you’ll get there.
A high savings rate does more than just build your bank account—it builds discipline. It forces you to live below your means, and that’s a trait almost all self-made millionaires have in common. Even once they’ve made it, they keep their spending in check and continue to save. Why? Because they understand that financial freedom isn’t just about how much you earn — it’s about how much you keep.
But What About Investing vs. Saving?
Now, a common question I get is: “How should I divide up that 10–20% savings? How much of it should I be investing versus just saving?” Great question.
To make this super simple, imagine breaking your savings down into three buckets:
- Emergency Fund
- Investments
- Short-Term Goals
So here’s how it could work in practice: every time you get paid, you immediately take 10% to 20% of your take-home pay and move it into your savings strategy. The first priority is to build an emergency fund—ideally, enough to cover 3 to 6 months of your living expenses. This is your safety net for when life throws you a curveball (and it will).
Once your emergency fund is full, future savings should be split between investing for the future (like retirement) and short-term savings goals (like buying a car, taking a vacation, or saving for a wedding).
A Real-Life Example
Let’s say you want to get engaged in the next couple of years, and you’re saving for an engagement ring. During this period, you might shift more of your savings toward that goal—maybe 15% to short-term savings and 5% to retirement investments, instead of a 10/10 split. That’s totally okay! The key is to always keep saving, even if your allocations shift depending on life priorities.
Then, once you’ve hit your short-term goal, you can re-adjust and funnel more back into long-term investments. The important part is that you stay consistent with your overall savings rate.
2. Fixed Expenses
Alright, let’s talk about the second key number you need to keep an eye on: your fixed expenses. These are the bills that come knocking every single month—things like your rent or mortgage, car payment, gym membership, insurance, subscriptions, utilities—basically anything you’re committed to paying on a regular basis just to keep your life running.
Ideally, your fixed expenses should take up about 50% of your take-home pay. But if it creeps up to 55% or even 60%, don’t panic—you can still manage just fine. That said, once you’re hitting 65% or more, especially near the 70–75% mark, that’s when it’s time to hit pause and really assess where your money is going. At that point, there’s not much room left for saving, investing, or enjoying your money.
Here’s the thing—most people have the same big spending categories: housing, transportation, and insurance. And while it’s tempting to focus on cutting small things like your daily coffee or that Spotify subscription (which might save you a hundred bucks a year), those don’t move the needle much. If you really want to make a dent in your fixed expenses, you’ve got to go after the big stuff.
For example, with housing, maybe you can negotiate your rent if you’re renewing a lease or offer to sign a longer lease term for a discount. I actually did that myself—when I signed the lease on my current apartment, I got a slight discount and two free weeks of rent just because I was willing to sign a longer contract and the rental market was a bit slow at the time. It never hurts to ask.
Next up is transportation. If your car payment is sky-high, maybe it’s time to consider downsizing to something more affordable. You can also look into transferring your lease, refinancing your car loan if interest rates drop, or your credit score improves. Another option to reduce your transportation cost is you can always look for ways to save on commuting. That means maybe carpooling, taking public transport once or twice a week, or even biking if that’s an option—it all adds up. Little moves like these can really free up cash every month.
And don’t forget about insurance—this one’s sneaky. A lot of us are overpaying and don’t even realize it. Try calling a few insurance companies or using a comparison tool online to check for better rates. It might take a few minutes of your time, but you could easily save a few hundred dollars a year, depending on what and how much you’re insuring.
Focus on the big expenses first. A small cut in those categories can go a lot further than cutting lattes. Even reducing your fixed expenses by just 5% can make a massive difference—especially if you invest that savings. Over time, those little shifts in your budget could help grow your retirement fund and bring you a lot closer to long-term financial freedom.
3. Discretionary Spending
Next up on your journey to financial clarity: discretionary spending. This is the third key number to track, and it’s actually the most flexible part of your budget. So how do you figure out what this number should be? Simple—whatever’s left after you’ve accounted for your fixed expenses and savings.
Let’s say your fixed expenses take up 60% of your income, and you’re saving 10%. That leaves you with 30% for discretionary spending—aka money you can spend however you want. That’s why it’s called “discretionary”—you get to decide where it goes. Maybe it’s going out for sushi every weekend (which is 100% my guilty pleasure) or saving up for a concert, this is your fun money.
Now ideally, you want to cap your discretionary spending at around 30% of your take-home income. That’s a healthy balance between enjoying life now and preparing for the future.
Let’s be real—discretionary spending is important. Otherwise, what’s the point of earning money if you can’t use any of it to enjoy life? You’re probably reading this because you want to take control of your finances so that, one day, you can retire comfortably and afford to spend on the things you truly love. And that’s exactly what this part of your budget is for: living your life with joy and purpose.
But here’s the key—make your spending intentional. One helpful method is called the conscious spending approach. It’s pretty straightforward: before making a purchase, just ask yourself, “Does this bring me joy or add real value to my life?” If the answer is yes, go for it. If not, maybe put it back on the shelf. It’s kind of like that Marie Kondo book method from The Life-Changing Magic of Tidying Up—if something doesn’t spark joy, you thank it and let it go. We’re applying that mindset before we buy stuff.
For example, if travel is something you’re truly passionate about but most of your discretionary money is being blown on impulse buys from Amazon, then it might be time to realign your spending with what actually lights you up.
Here’s something to keep in mind: most millionaires aren’t living wildly extravagant lives. They’re actually very thoughtful with their spending. They focus on experiences or purchases that bring them long-term fulfillment, not just temporary excitement. That’s the mindset shift that makes a huge difference over time.
And hey, if you ever need help figuring out where to put your discretionary money… just invite me over—we’ll spend it all together (just kidding, of course ). But really, keep this category fun and mindful. Your future self will thank you for it.
4. Net Worth
Alright, here’s the last big number you definitely want to keep an eye on if your goal is to become a millionaire: your net worth.
If you don’t already know what your net worth is—or even a rough estimate—it’s time to figure it out. Think of it like this: if you were trying to lose 5 pounds at the gym, you’d want to know your starting weight, right? Otherwise, how would you even know if you’re making progress? Same deal with your money. You need that baseline.
Calculating your net worth is actually super simple. Just add up all your assets (like your house, investments, savings accounts, etc.), then subtract your debts or liabilities (like car loans, credit cards, student loans). That final number? That’s your net worth.
Let’s say you own a house worth $200,000, have $20,000 in your bank and investments, and owe $30,000 on your car loan. Your net worth would be:
$200K (house) + $20K (cash/investments) – $30K (car loan) = $190,000.
Boom—done.
I personally like to check my net worth every month, but honestly, that might be a bit much—especially if a lot of your money is in the stock market. The market can jump up and down like a yo-yo, so tracking quarterly or even twice a year might give you a clearer picture of your long-term progress without all the noise.
And here’s the thing: every millionaire I know tracks their net worth closely. It’s not being obsessive, it’s just being aware. When you check in regularly, you’re forced to face your finances head-on. You stay motivated. You stay focused. And most importantly, your goal of building wealth starts to feel real—not just some vague dream floating out there in the future.
So go ahead—start tracking it. Watch those numbers grow. You’re not just working toward millionaire status… you’re thinking like a millionaire already.
