In Your 30s? Here's How You Can Be a Millionaire by Age 65

Becoming a millionaire could be more achievable than you think.

Did you know that there are almost 25 million millionaires in America? According to a report from Credit Suisse, the U.S. is home to more millionaires than any other country in the world. In fact, there may well be one living on your street. Most millionaires don't drive flashy cars or live in expensive homes. Many have built their wealth by living a modest lifestyle and consistently investing their cash.

How you can become a millionaire by the time you're 65

If you're in your 30s, retirement probably feels as if it's a long way away. The desire to enjoy your money now rather than putting it away for your old age is understandable. But as we'll see, the more money you can invest in your thirties, the longer it has to accumulate value. Time in the market is a powerful thing.

Here are four steps to take if you want to become a millionaire in the next 30 years.

1. Understand the difference between saving and investing

The words saving and investing sometimes get used interchangeably, but there is a big difference between them in terms of wealth building. The money in your savings account will only earn a small amount of interest. It's a good place to keep your emergency fund and other cash you might need to access quickly, but it won't make you millions.

In contrast, investing involves buying assets that will generate returns, for example by buying stocks or bonds. Over the past 30 years, the S&P 500 has averaged returns of around 10% a year. Sadly, that's only an average -- there will be years when equities fall in value. But if you only invest money you don't need in the short term, you'll be able to wait out the bad years and profit from the good ones.

If you have access to a tax-advantaged account such as a 401(k) at work, try to max out your contributions. If your employer will match some of the money you put in, make the most of what's essentially free money. You don't have to pick individual stocks. Instead, see if you can build a diverse portfolio by using index funds or ETFs that give you exposure to a mix of equities.

2. Let compound interest do the heavy lifting

Compound interest is essentially what happens when you earn interest on your interest. For example, if you invest $1,000 and it earns an average of 8% in interest per year, you'd earn $80 in interest in year one. If you leave that money alone, the next year, you'd be earning interest on $1,080 -- your original $1,000 plus the extra $80.

Let's say you are 35 now, and already have $10,000 in investments. If we assume an 8% return, the table below shows how much you might have when you're 65, depending on how much you invest.

These calculations are very simplified -- they don't take inflation into account and there is no guarantee of a consistent 8% return. All the same, it shows how compound interest and time can work in your favor. Even if you do nothing, that $10,000 could have multiplied tenfold by the time you are 65.

3. Live within your means

You might be looking at the table above and thinking, "Where can I find $750 a month? My paycheck barely covers my costs!" If that's the case, you're not alone. More than 50% of Americans live paycheck to paycheck, and spiraling living costs have put even more pressure on people's bank accounts.

Spending less than you earn and investing the rest is a core aspect of building wealth. If you're not sure how, start by working out where your money is going. You can do this by reviewing your bank statements or using a budgeting app. Once you have a clear picture of what you're spending, see if there are areas you might be able to cut back on. Do you have monthly subscriptions you're no longer using? Are there ways you could cut your grocery spending?

If you don't want to make cuts or can't, perhaps there are ways you can increase your income. That might involve asking for a raise at work, or looking for a side hustle to give you some extra cash. If you can earn more money, try not to give into the temptation to spend more. Instead put that cash straight into your investment account.

4. Don't take on high-interest debt

If you carry high-interest debt, compound interest will work against you. Instead of building wealth, you'll actually pay interest on your interest. That can cause the amount you owe to snowball and is why credit card debt is a big enemy if you want to become a millionaire.

If you carry high-interest debt, make a plan as to how you'll pay it off. Work out how much you might feasibly pay down each month and which balance you plan to tackle first. Once you have a plan, taking the first step becomes more manageable.

Becoming a millionaire could be more achievable than it seems

So much depends on your financial situation, but building wealth could be more achievable than you think. If you're in your 30s and want to become a millionaire, look for sustainable ways to invest money each month. If you don't feel able to save $100 a month, start with $50 and see where it takes you. The important thing is to make a start. Once investing becomes a habit, you may be on your way to gaining millionaire status.