How to become a millionaire by the age of 30?

There is nothing risk free with a high return. Even most safe investments have some degree of risk and generally the risk increases with the potential for a higher return.

Savings accounts are insured up to $100K per institution, so having 4 $100K jumbo CD's at one bank means you are only insured for the first $100K. If you become a millionaire, you can obviously have some risk even if all your money is in a few cash accounts so you would have to get a money market account at one bank, and every time you have enough together, shop around for the highest paying CD at a bank you don't already have an account with. Those rates can beat inflation, especially with $25K or more in each account. You also would want to consider that if you setup the account with $100K for the jumbo rate, you would put at risk of loss all your future interest earnings. However, the risk of that happening are very small with a branch bank of a very large chain.

If you want to get richer quicker, you could invest in bonds which are relatively safe at the higher grades, but companies can turn south (i.e. GM and Ford) so a way to reduce the risk would be to invest in a bond mutual fund that has been averaging the rate of return you want, knowing that the higher the return, the higher the risk they get caught in the next Michael Milken or subprime financing catastrophe. I believe I recently saw bond mutual fund indexes from 4 to 11%, which should cover the rate of return you are looking for while minimizing risk by collecting bonds from several companies in several sectors.

The stock market has a lot more risk than bonds which I don't think you are willing to accept. Oh and don't even think about options or commodities. The risk is more like gambling.

By: Frank