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The key to retiring a millionaire may depend on maintaining one habit that is easier said than done
Business Insider8/4/2017 7:36:00 AM

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Getting rich — and staying rich — is hard work.

While Fritz, the blogger and "401(k) millionaire" behind The Retirement Manifesto, knows this to be true, he says he established one key habit early in his career that virtually guaranteed his future wealth.

The 54-year-old has been contributing to his 401(k) consistently since the day he started his first post-college job at 22, he wrote in a post on personal finance blog Budgets are Sexy.

During his first six years in the corporate world, Fritz, who plans to retire with his wife next year, managed to more than double his annual salary. While many would use the extra cash to upgrade their housing, buy nicer clothes or fancier cars, or take more vacations, he never used his increase in income as an invitation to spend more.

"My wife and I have always lived below our means, and I firmly believe that's played the biggest role in becoming a millionaire," he wrote.

"As my salary continued to increase, we continued to increase our 401(k) contribution," he said. "If I received a 3% raise, for example, I'd increase my 401(k) contributions by 2% in the month the raise took effect." A 1% increase in take-home pay was enough to feel more flush each month, he said. They continued this strategy until they maxed out contributions each year.

"I've been contributing 15% or more for at least two decades now, and max out my 401(k) every year," he wrote. "I've never taken any money out of my 401(k). Invest it, and forget it."

While their 401(k) balance "inched" along in the first 10 years, it eventually progressed and became exciting to track, says Fritz. In March 2013, they officially hit the $1 million mark.

Of course, it's not easy to forgo money in your pocket to bulk up a savings account you won't see for decades, but Fritz said it was the best strategy to avoid lifestyle inflation — the urge to spend more money because you're earning more money. Plus, the contributions were automatic, which "forced" the couple and their daughter to live frugally.

"As my dad used to tell me early in my career: 'It's easy to become wealthy. Just spend less than you make, and do it for a long time,'" he wrote.

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