How $5/Day Millionaires Actually Make Money

“Make coffee at home, invest the money you saved in a low-cost index fund, and retire a multimillionaire.” This is some of the most common financial advice in America. There are numerous books, YouTube channels, and podcasts dedicated to the topic of saving $5 per day and harnessing the power of compound interest.

There’s nothing wrong with this advice. If you invest $152 each month (essentially $5 per day) at a 10% annual rate of return, you will compound your savings to $1,080,538.86 over the next 43 years.

It’s a simple strategy and one that 99.99% of people can follow.

Start saving $5 per day at 25, you have a million-dollar portfolio at 68.

That’s great!

I have nothing against this advice and think it’s a good way to get regular people to understand the power of saving and investing. In fact, The Automatic Millionaire was one of the very first personal finance books I ever read. It’s a title that’s well worth a library borrow if you’re completely new to wealth-building and compound interest.

However, this type of indexing plan does have limitations.

And in today’s article, I want to discuss the differences between what $5/day millionaires preach versus what $5/day millionaires do.