If you're not one of the 1.1 billion users on TikTok, you may be wondering...
Who is Addison Rae?
20-year-old Addison Rae Easterling is the second-most-popular TikTok star, with more than 77 million followers, behind 16-year-old Charli D'Amelio and her nearly 110 million followers.
How much does Addison Rae earn?
Addison Rae earned the title of the highest-earning TikTok star in 2020, bringing in an estimated $5 million, according to Forbes.
Beyond social media, she's expanded into the entertainment and beauty industry. Oh, and her manager is none other than Kris Jenner.
How can regular teens become multimillionaires like Addison Rae?
There are many reasonable ways for "regular" teenagers to grow their wealth, as time is most certainly on their side.
Here are six ways for them to achieve multimillion-dollar status:
1. Establish long- and short-term savings goals
Long-term goals: You must make it a goal if you hope to reach multimillionaire status one day. Map out what the road between now and retirement looks like, and what steps you can take in between to achieve your savings goals.
Short-term goals: Consider how to generate income in the present, and ways to save a portion.
Whether you decide to make money through a regular job, or a side hustle such as babysitting, selling used clothing online, or tutoring, the practice of setting aside money will help you develop key habits to save more in the future.
So what should you do with these extra savings in the meantime?
2. Start investing as early as possible
As a young person, your growth potential is huge, whether you have $20 or $1,000 to invest.
Let's break it down:
- If you invest $50 at age 18 and never invest again, that could be worth $157 by the time you're 30. That's assuming you invest the money into the stock market, and it grows an average of 10% per year.
- If you invest $50 per month, every month, from the time you're 18 to the time you're 30, you'd have $13,565.
- If you invest $50 per month at that same 10% average annual return from the ages of 18 to 65, you'd have $551,162. The amazing part is that only $28.2K of that would be your own contributions. The extra $522.9K comes from stock market growth. This means you'd have earned more than a half-million dollars for free.
Not sure where to start? Check out ways to begin investing.
3. Live below your means
Rather than spending a full paycheck of $600, practice automatically saving a small portion (say, $50), and live as though you actually made $550.
Again, if you're able to put that extra $50 toward investing each month, even better.
It's important to note that not everyone has the luxury of setting aside money for savings with every paycheck. You may be saving for college, paying off student loans, or have other important financial obligations. But saving for those types of obligations will still teach you the art of saving and managing money wisely, which will be highly beneficial in the long run.
4. Choose a career you love
You've likely heard the saying, "If you do what you love, you'll never work a day in your life." There's some truth to that.
We won't all become Hollywood stars and social media celebrities like Addison Rae, but that doesn't mean you can't be successful doing something you love that also generates steady income.
If you are lucky enough to have a career that you love, the idea of getting up to go to work each morning won't feel so daunting anymore. Your passion, motivation, and skill set will naturally shine through -- and the money should follow, making your savings goals that much easier and enjoyable to achieve.
5. Have multiple streams of income
Taking notes from Addison Rae, don't rely on just one source of income. A steady source, such as a full-time job, is a great place to start. But expanding your stream of income beyond one job can allow for much greater savings potential, since an extra couple of hundred dollars to invest per month could pay off big time in the long run.
There are many ways to make money on the side, such as actively using your talents, hobbies, and interests to earn income. You just may have to get creative!
6. Start saving for retirement ASAP
One of the easiest ways to achieve millionaire status by the time you retire is by contributing to retirement accounts as early as you possibly can.
This may seem far off, but once you're able to start contributing, it's a great idea to take advantage.
Two popular retirement accounts to keep in mind are:
- A Roth IRA: A retirement account that allows your money to grow tax free. You can contribute to a Roth IRA at any age, as long as you're making taxable income.
- A 401(k): A retirement account offered through an employer.
Make sure to contribute to these retirement accounts in addition to your investment portfolio, and continue living below your means. Do all of this and you're setting yourself up for multimillionaire status upon retirement.
And remember: Time is your most valuable asset, so start saving and investing as soon as you can!