Here’s how to become a millionaire on a low salary — it’s far more realistic than you may think

Looking to our neighbours down south, only 31% of American millionaires earned an average annual income of US$100,000 over the course of their careers, according to The National Study of Millionaires, conducted by Ramsey Solutions. Perhaps even more surprising is that one-third of these millionaires never reached the six-figure income milestone throughout their careers.

In other words, it’s completely realistic to reach a seven-figure net worth without earning a six-figure salary. However, this modest income path to millionaire status does require more effort and discipline — here's what you need to know.

Expenses are the key

The key to accumulating wealth is managing expenses. Many ultra-high-income individuals struggle to break into the millionaires club because they let lifestyle inflation consume them.

In fact, 85% of Canadians think living paycheque to paycheque is the new norm, with only 7% putting a fifth of their earnings into savings.

By comparison, someone with a modest five-figure income coupled with better savings and investing skills could be more likely to reach millionaire status. However, a high-savings rate isn’t a silver bullet. To break into the millionaires club with a mid-range income, you’ll need to invest wisely and start as early as you can.

Start investing early

The magic fuel that drives the compounding growth effect is time. In a long enough time frame, even modest savings and lacklustre investment returns can turn into serious wealth.

For instance, an 18-year-old would need to save only $250 a month and earn a modest 7% annual return on investment to reach $1 million by the age of 66. Put simply, if you want to accumulate exceptional wealth without an exceptional income, starting as early as possible is essential.

Avoid or limit debt

Another essential ingredient in your modest-income-to-millionaire journey is reducing your exposure to debt. After all, a high-interest loan can effectively offset all the positive impacts of a diligent savings and investing strategy.

For most people, avoiding debt — especially the expensive type — is their biggest challenge. As of late 2024, the average, non-mortgage Canadian debt load rose to $21,931, with the total debt amounting to $2.56 trillion, according to Equifax.

Serving this debt could be one of the key reasons why the average personal savings rate in America is only 5.7% in Q1 2025, according to Trading Economics.

By limiting or eliminating consumer debt, you can save more. That could be the key to your financial freedom, regardless of your income.

Creative planning

Life can be messy and even if you follow all the traditional financial advice, your journey to financial freedom could be derailed by health issues, divorce, bankruptcy or emergencies.

If you’re approaching retirement without much savings or a high-paying career, your chances of becoming a millionaire are greatly diminished. However, this doesn’t mean it’s impossible to enter the club.

Creative solutions could help you get there despite the odds. For instance, you could boost your savings rate by temporarily moving to a town or country with a lower cost of living. Working remotely while paying modest rent in Mexico, for example, could help you accumulate wealth faster.