Just how do you become a millionaire, anyway? On this day after the Forbes list of the world’s richest people came out, it seems appropriate to discuss just how you could become one of them. In the first place, being a mere millionaire these days is no indicator of great wealth, although it’s still the term thrown about the most when people (those that aren’t, anyway) discuss being rich.

In fact, I remember an interview that was done a few years ago about retirement savings in which a young girl expressed amazement when the interviewer asked about saving a million dollars for retirement. She was of the mistaken opinion that she’d never need to save even close to that amount to comfortably fund her retirement. Apparently she’d either forgotten about the effects of inflation, was independently wealthy, or was planning on marrying up. Maybe she just loved the whole mountain tent decor and would be comfortable living that way.

In any case for many that have aspirations of attaining wealth becoming a millionaire is merely the first step in the process. Given that first step or not, one must get there at some point in the process, just how do you become a millionaire?

Besides winning it, or being given your million dollars, there are two basic paths you can take toward millionaire status. You can work for someone else and invest a portion of your income, or you can work for yourself and invest a portion of your income. Either way has it’s advantages and disadvantages. In addition, there are countless combinations you can use to reach you goals within these two very broad avenues. To become exceedingly (is that even possible??) wealthy, you’ll have to either:

A) Start your own successful business, then plan and execute an exit strategy that would include taking the business public or selling it for a substantial amount of money.

B) Work for a company in the early phases of its existence and be given a portion of the business that will be worth a substantial amount of money. This method worked well for many people in Sunnyvale, Redmond, Austin, Mountain View, and Cupertino. You can then invest the substantial windfall to become quite wealthy.

C) Get one of the few extremely high paying jobs with a salary and bonus structure such that you have a substantial amount of money left over to invest. You must then invest at a rate of return that will result in your extreme wealth. Not only must you land such employment and make the appropriate investments, but if you take this route, you must live fairly frugally in the wealth generation phase. It is hard for many to resist the pull to plunk down their new found money on a 8,000 square foot golf course home, a Bentley, and trips to Monaco for the Grand Prix every year. In many of these types of jobs, your peers will live with the trappings of wealth, and it can be easy to emulate their behavior.

Of those younger billionaires on the Forbes billionaire list, 68% of those under 40 years old made their money starting with nothing, so take heart, it can be done. Getting the mindset to actually achieve that level of wealth may be almost as difficult as getting that rich itself.

What about just becoming a plain old, garden variety millionaire? Thankfully, that is much easier, and doesn’t really require too much beyond some basic financial planning and discipline. You need to make some good decisions about the direction of your life along the way. If you take the work for someone else approach, rather than starting your own business, you’ll need to plan and execute a career path that affords you enough income to invest for retirement such that you’ll reach a million dollars in assets, not including the equity in your primary residence. This can be easily done, and in fact, according to the most recent Merrill Lynch wealth report there about 9.5 million such people in the world.

For example, say you play around a bit in college, change you major a time or two, and don’t graduate until you’re 25 years old. Upon graduation, you get a decent, but not very high paying job, earning $35,000 per year with good benefits. If you plan to get only a 3% annual raise (less than the cost of living), put away 10% of your salary toward retirement (assuming no company matching, so it’s not too great of job), and earn an 8% rate of return on your investments, you could easily become a millionaire. In fact you’ll retire at age 65 with a nest egg of about $1.2 million. On this you can live with 97% of your last year’s salary of $110,000 per year until you die at 90, and leave a $1.3 million nest egg to your heirs. You could even retire at 63 and just manage to eat up your retirement savings by the time you reach 90.

The above calculations assume you’ll get a big, fat Zero for Social Security, because face it, for anyone under 35 now that could easily be the case. It also assumes a 3.1% annual inflation rate. Just how nice would an employer matching contribution be in the above scenario? If you were a bit more ambitious and received on average a 5% annual raise, you would retire with a $1.56 million nest egg at 65, so you would be a millionaire times 1-1/2. It may not seem like much, just increasing your retirement nest egg by such an amount, but in fact it’s extremely powerful. Such an increase would allow you spend $150,000 per year in retirement, instead of only $107,000. Even spending almost 50% more, your retirement savings would still continue to grow, such that when you took your last breath at 90, you’d be everyone’s favorite uncle, because you’d leave your heirs a $5.2 million present.

What if you didn’t want to wait until you were in your 60’s to become a millionaire?

For the average investor, one of the great things about the Internet is the proliferation of online stock brokers. Most of these are also discount brokers, so an investor can get both accessibility and low prices on their stock trades. It’s a stark contrast to the days when your father had to make a call to his broker and pay huge fees to make a trade. One of the results of this whole situation is that there are far more investors in the stock market than ever before. It makes perfect sense. Any time the price of a product or service or service is lowered and the access to it is facilitated, the number of users will increase, providing there is a demand for the item in question.

The elimination of the NYSE’s fixed commission structure in May of 1975 opened the door for the discount brokerage. Prior to that day, stock brokers charged investors a fixed commission for every trade, and it was expensive. There was no freedom to negotiate either, as minimum trade commission prices were set by the SEC. It was a real old boys club, and most would-be investors were excluded. After the process was deregulated, discount brokers began to appear, one of the earliest and most famous being Charles Schwab.

Today there are many discount stock brokers, much to the benefit of all investors, weather they are hard core traders who make their living from investing, or the casual investor who may only make a few trades a year. With the ability to trade from home, and free from the requirement of having a broker involved in every trade, there are no longer barriers to those who would like to dip their toes into the stock trading waters before they take the plunge all the way. Those who like to trade consistently have things much easier as well.

The evolution of discount brokers effectively removed the last barrier to that group of investors. Now, with the price of trades ranging from as low as free to $20 a trade the cost of trading has been reduced to the point where it’s been effectively eliminated for most people.

The other huge advantage of the Internet and online brokerage for most people is that it’s now very easy to find information (not always true) on various investment choices. Weather an investor is looking for general information a particular market, company or even legislation, it’s all there for the browsing. Most online discount brokerages make available a complete set of tools for their customers. The array of tools available now to the amateur investor would actually be the envy of most professionals only a few years ago. Most even offer real time, streaming quotes. In the not too distant past, that would have been the province of the hard core professional investor or institution.

There a still full service brokers, and most of those have online and even discount style accounts. Many investors today don’t feel they need the level of service (and are unwilling to pay for it) offered by a full service brokerage houses. Who are the big players in the discount brokerage game, and what do they offer you? Well, here is a comparison of some of the most popular online discount brokers and what they offer you:

TD Ameritrade – No commission trades for the first 30 days, but you may want to keep trading for a bit beyond 30 days. After the initial 30 day period, you’ll pay $9.99 per trade with no maintenance fees. They offer 24/7 online and phone support. There is a $2,000 minimum required to open a non-IRA account and a $1,000 minimum for IRA accounts. Many investing tools are free, however real time news from Dow Jones will cost you about $30 a month.

E*Trade – E*Trade was the first online brokerage, dating to 1983, but at that time, they weren’t something anyone could just log on and use. Now they offer stock trades according to a graduated pricing plan. Those who make up to 29 trades a quarter and have less than $50,000 in their E*Trade account will pay $12.99 per trade. If you have a larger nest egg and/or make between 30 – 149 trades a quarter, you’ll pay $9.99 per trade. Options traders can tack on an additional .75 fee per trade. Broker assisted trades cost an additional $45. E*Trade has no required minimum for IRA accounts. Pink sheet stocks will require a $54.99 fee to trade. E*Trade has an annual $160 maintenance fee.

Zecco – Zecco offers free stock trades for those who make fewer than 10 trades a month and have more than $2,500 in their account. That makes them my choice for the occasional or semi-active investor. Those making more than 10 trades a month will pay only $4.50 per trade. If you prefer options, you’ll spend $4.50 + 50 cents per contract. Something else favoring beginning investors is that there are no minimums required to open a Zecco account. Find out more here.

Scottrade – Scottrade offers low, $7.00 online trades for stocks trading at over $1.00 per share. Pink sheet stocks will require a $27 fee to trade. If you need help from a real, live person to make a trade, broker assisted trades run $27 as well.(the same $27).If you’d like to walk in and talk to someone face to face on occasion, they have over 330 branch offices scattered throughout the country. Scottrade offers free, streaming, real time Dow Jones information.

Charles Schwab – Thanks to a persistent ad campaign in the ‘80’s and ‘90’s, Chuck is who many people think of when they hear the term “discount broker”. They’ve been around since way before discount brokers went online. They charge $12.95 to trade for orders of less than 1,000 shares. If you exceed the 1,000 share limit, they’ll tack on a penny and a half per share fee, but no account maintenance fee. Charles Schwab also has real time Dow Jones info for free if you’re an account holder.

Relief is on the minds of millions of people due to the credit industry problems and the huge levels of consumer debt in the U.S., but what do people really mean when they talk about debt relief? Are there programs that will simply get rid of your debt so you can start anew?

Actually yes, there are debt relief programs that can help you do that, but it’s not really that simple. After all, you don’t get something for nothing, although it could be argued that if you get a portion of your debt eliminated, you actually did.

There is some confusion among many debtors about the differences between the various debt relief programs. Are debt settlement, debt relief and debt counseling all synonymous? Actually no, they’re not. They actually mean different things, and if you choose to avail yourself of one of these options to handle your debt, the option you actually choose could have long lasting effects on your credit and future financial picture.

Debt settlement is a term that most often refers to the process of negotiating with creditors to only repay a portion of a debt. Although that may sound like a fantastic option to many creditors, remember the whole free lunch thing. Using debt settlement services will impact your credit in a negative way and affect your ability to secure future credit, and the interest rates you pay for years to come. There are a few basic ways that these programs work, and before you enter into any such program you absolutely must go over any agreement with a fine toothed comb, preferably with the advice of an attorney who’s well versed in such matters. It may seem like spending money to seek the advice of an attorney may just be compounding your debt problems, but a few hundred dollars up front may save you thousands of dollars and some financial migraines later.

Some debt settlement firms will simply charge you a flat fee for their services, but the more common scenario is for them to charge you either a percentage of the total outstanding debt or a portion of the savings they provide through the negotiated settlement. With most debt relief negotiations, the debt relief company will negotiate a settlement with each of your creditors that will represent between 40% – 50% of the original debt amount. They must negotiate independently with each credit card account. Debt relief companies can handle other types of debt as well, but credit cards are far and away the most common. Typically only unsecured debt is negotiated through this process, as unpaid secured debt will be satisfied by the creditor repossessing the security for the debt, such as a vehicle or land.

As the debtor, you will be required to set up a debt repayment plan for the agreed upon amount with each open account. This will include the payment to the debt relief company, the creditor, and the time frame for the repayment plan. You will then make payments either into an account set up by you, or an escrow account set up by the debt relief company. Once you have accumulated the requisite amount your debt will be satisfied. The process repeats with each debt until all your debts are paid at the individually agreed upon amount.

This is one of the places where things can go wrong for you as the creditor. Stories abound of less than scrupulous debt settlement companies simply keeping all the funds you’ve already paid should you miss a payment. This does happen, and needless to say that could cost you a bundle. If you feel that you realistically will not have the money to maintain such a settlement plan, you may want to consider another option, but even more important is to thoroughly evaluate any such agreement before you enter into it.

This highlights the importance of having a qualified, independent party look over the contract before you sign it. If you sign a contract that permits the firm to keep any funds paid to date should you miss a single payment, it’s really your fault for such a debacle. If you feel such a clause is worth it in order to secure a substantial reduction in the amount of your debt, that’s a decision only you can make. Remember that you will have your debt reduced a substantial amount, but there is also the debt company’s fee to consider when calculating your total savings. In total, the savings may not be as large as you think.

The process lasts from 1 – 4 years in the majority of cases. It is exceedingly rare for the debt relief company to offer any sort of guarantee for their services. The key is that you should be using this technique as a way to avoid bankruptcy.