I have a friend at work who is in his mid-twenties whose extended family owns land in Texas. Recently his family struck oil and are now receiving a windfall. This morning he found out what his cut was going to be, and it will essentially double his current income. He was ecstatic. He immediately came into my office and asked me what he needs to do to become a millionaire in 10 years or less.

I guess a little background is in order as to why he asked me, of all people. This guy was a financial mess just a few years ago, living paycheck to paycheck, with a lot of credit card debt, and had just bought a new truck for almost $40k. He was stressed out all the time. I made a quick budget for him showing that he was spending more than he was making. Last year, when he got married and had a kid, I helped him calculate how to adjust his tax withholdings to maximize his paychecks instead of getting a large refund at the end of the year. I also advised him to contribute to his 401k, even if it was just a little, so that he could get the company match. When I showed him the miracle of compounding interest, he was amazed at how much even just 6% of every paycheck would end up giving him at retirement (around $1.5 million). After we were done, he just about was breaking even every month. So I've become somewhat of a financial advisor to him.

Back to my office this morning. So I asked him...

"Aren't you still renting?" - Yes
"And didn't you just move into a new house where the rent will be 50% more?" - Yes
"Don't you have almost $20k left to pay off that new truck you got?" - Yes
"And you still don't have any money in savings?" - No
"And your baby turned how old this month?" - 8 months

Yeah, don't reserve a dock at the marina just yet.

For the next half hour, I talked to him about putting some money away in savings and to save up for a down payment on a house, getting rid of his remaining debt, and maxing out his 401k. I could tell that I was quickly letting the wind out of his sails. His look of joy slowly faded into deep concentration.

He asked, "so how is this going to help me become a millionaire by the time I'm 35?"

I told him that it probably wouldn't unless he was really lucky. I tried to console him by saying that I could advise him to do some really risky things which could net him the cool million, but it would mean living with his mom, taking the bus, and eating bologna sandwiches every day - plus the risk that he would have to do that the rest of his life if it didn't work.

He jokingly told me to stop killing his dreams and that he wished he had never spoken to me so that he could live in his blissful ignorance.

He told me that he was hoping for some sexy get-rich-quick plan from me because he wanted it all now. I told him that is the attitude that will actually ensure that he won't get rich... unless he's really lucky, that is... but I suppose that someone whose family strikes oil cannot be too unfamiliar with luck.

So, in the end this is the non-sexy advice I gave to him:

1. Raise his 401k contribution to get the maximum employer match possible
2. Open an online savings account (at 5%) for general savings and to save for a down payment on a house
3. Open a 529 college plan for his son
4. Send in extra payments on his truck so he'll have it paid off in a year.

I told him if he does this, he may not feel rich, but he'll have peace of mind, and who wouldn't want that?

Learn more about this author, Nathan Kim.
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