What is a Thousandaire? How Do I Become One?

Have you heard of the term “thousandaire”? It’s a perennial buzzword in the personal finance world, and if you’re an investor looking to build your wealth, you’ll want to take note of this term.

Per Wiktionary, a thousandaire is an English word with the following meaning

Etymology

thousand +‎ -aire

Noun[edit]

thousandaire (plural thousandaires)

1. (humorous) Somebody whose wealth is greater than one thousand dollars, or the local currency. 

Source.

So, essentially a thousandaire is someone who has at least a net worth of at least thousand dollars, but less than one million dollars.  This term is often used to describe early-stage investors, or mid stage wealth builders who are just starting out on their wealth-building journey, or those who have achieved some financial stability but haven’t yet reached the status of a millionaire.

Thousandaire status can be achieved through various means, such as saving money, budgeting effectively, investing, inheriting money, starting a business, or any combination of these strategies.

How to Become a Thousandaire

If you want to become a thousandaire, the first step is to calculate your net worth.  Calculating your net worth is super easy.  You just have to total up the dollar value of everything you own.  This is everything that is worth money – usually stocks, mutual funds, bonds and retirement accounts, as well as your car , home equity, etc.  Then you total up everything you owe – credit card debt, car loans, student loans, etc.  Then you take your assets totals and you minus your liability totals.  Its easy.   The formula looks like this:

Net worth = assets – liabilities.

Once you know your net worth, you can set a goal for how much you want to increase it by each year.

Here are some basic guidelines for building wealth to become a thousandaiare:

• Save and invest at least 10 to 20% of your income
• Avoid high interest debt
• Maximize your contributions to tax advantaged retirement plans (401(k) and Roth IRAs)
• Take action: Don’t delay
• Save and Reinvest: Reinvest your investment returns
• Build up an Emergency Fund
• Own.  Own your home, don’t rent
• If you are married, work with your partner.  Set goals, save and invest with them
• Maximize the return you get on your investments.

Following this last point here is a great video from Charlie Munger with some good old fashioned advice on how Thousandaires can get ahead – although it doesn’t say so specifically:

There are other ways to become a thousandaire fast, but saving and investing aggressively works and is the most common.

Advantages of Being a Thousandaire

While being a thousandaire may not seem like a big deal compared to being a millionaire, financial security has numerous advantages. Here are a few examples:

– Thousandaire status means you have some basic assets and can cover your basic expenses without worry. You won’t be living on your credit cards.
– It allows you to live comfortably and afford a few luxuries, such as travel or hobbies, without the psychological burden of worrying about money.
– Achieving thousandaire status is a significant achievement and is proof that you are on the right track to meeting your financial goals. Not everyone gets there.

Build on Your Thousandaire Status

Once you have achieved thousandaire status, a good next financial goal on it and eventually reach millionaire status. The reason why you want to do this is basically up to you, but there are some realities to life such as:

1. Retirement is expensive
2. Its easier to have impact if you have wealth.

So, here are some tips for continuing to grow your wealth:

– Set higher financial goals and regularly reassess your progress.
– Continue to invest in stocks, mutual funds, REITs, bonds and other income-generating assets.
– Consider starting a business or investing in real estate to generate passive income
– Stay disciplined and avoid lifestyle inflation, which is the tendency to spend more as you earn more.

Here are great reads from around the web:

Get A Good Laptop For Your Investing Activity

How To Become a Prodigious Accumulator Of Wealth

Nothing Beats Good Old Fashioned Pen and Paper Budgeting

You Can Become A Millionaire With No Money

Wrapping It Up: Keep Going!

Being a thousandaire is a significant achievement for most people. It represents financial stability and provides the foundation for continued wealth building.  You can become a thousandaire and eventually reach millionaire status if you stay disciplined and focused on your financial goals.