How to make a million

OK, so being a millionaire isn't quite what it used to be – but it's better than not being one.

Wealth Within chief investment analyst Dale Gillham says Australians have the opportunity to become millionaires as long as they're "diligent enough to stick to the plan".

AMP financial analyst Tony Rigby agrees and says there is no magic trick to wealth.

"Unless you're Richard Branson and you have a bright idea – and the majority of us don't – that's not the way to get your million dollars," he says. "It comes back to common sense basics, budgeting and planning."

The father of financial advice, Noel Whittaker, says the fundamentals remain the same. "Spend less than you earn. Be aware that little things add up. Get your money working for you and be aware that income from investments is taxed at a lighter rate than income from your salary."

But, I have no money. . .

The road to riches begins with a budget. Unfortunately, most people think budgeting is boring and make the mistake of thinking a higher salary is the solution to financial freedom.

"People who don't understand the value of money just end up spending it on a lifestyle," Mr Gillham says. "If you spend more than you earn, you can't invest and if you can't invest, you can't compound and if you can't compound, you won't be rich."

Mr Gillham says drawing up a simple budget for clients who claimed they had no spare cash often revealed as much as an extra 20 per cent they could be putting into savings.

"People see budgets as a constricting thing, but they actually liberate you because you suddenly understand the money in your bank account has a purpose."

But I'm a good saver. . .

Saving every penny is a great habit, but it's not enough to generate real wealth.

"If you're aiming for a million bucks, income isn't going to get you there alone," says Suncorp's financial specialist Gemma Dale.

Running a business and investing in things like property and shares are common ways to boost capital – and better protect you if one income stream fails.

"Remember risk can go either way," Mr Rigby says. "Strategies like gearing can either accelerate your wealth growth process or decelerate it badly."

Ms Dale says the key is to pick quality investments.

"You should only borrow to purchase income-producing assets because if they're not, generally speaking, you can't get a tax deduction for them," she says.

Mr Gillham says understanding how different investments work is essential before taking the plunge.

"Education is the first step in the process," he says. "Ignorance is very expensive. It not only costs people lots of money, but also lost opportunity which can be even worse."

But, I want it now . . .

Apart from the odd Lotto winner, very few people become millionaires overnight.

"It's the old adage – it's the time in the market, not timing the market," Mr Rigby says.

"If you put a strategy together, whether it be geared or non-geared, the idea is to stay in there and be disciplined."

Ms Dale agrees and says the power of compound interest only works if you invest for the long-term.

"Your $100 a month contribution doesn't sound like much when you're 18, but the portfolio you get to retire on when your 60 is going to be unbelievable."

But, Johnno said it was a good deal . . .

There are myriad ways to lose money. Racking up a credit card debt, borrowing for the wrong things and even getting divorced can ruin your chances of making your first million.

But the type of advice you get is also critical to whether your finances flourish or flop.

"You shouldn't listen to a tip you get from a friend or well meaning colleague at a BBQ," says wealth coach Jeremy Britton.

"The area of finance is a lot more complex than what it was and you really do need an expert to help you navigate through the minefield of legislation and different options."

CPA Australia's Rob McAdam agrees and says wannabe millionaires should also be wary of scams: "If it seems too good to be true, than it probably is."