What's Holding You Back from Your First $1 Million? Check Out These Possible Culprits

In your head, you've always known you'll make it to the millionaire club. However, getting to $1 million and beyond has proven more difficult than you thought (despite reading every book related to "The Millionaire Next Door" that ever existed). 

Wealthy people often say, "My first $1 million was the hardest to earn." 

Do you feel as if you've been hovering in $700,000 territory forever? If so, you may understand this sentiment completely. 

If you can't quite figure out how to turn your $1 million goal into reality, let's dive into a few reasons why you're having trouble bridging the gap. 

Culprit 1: You haven't planned well.

You need a plan if you want to have $1 million in your accounts. Just like any major goal, you'll need to plan for it. For example, let's say you plan to get a degree in college. That involves showing up to classes, making time to study and eventually earning your degree. 

When you want to invest to earn $1 million or earn $1 million, it's the same — but harder, because you may have to think carefully about how you'll lay out the path yourself. Ask yourself: 

• How much have I already invested or saved?
• How much will I need to invest per year? 
• What rate of return will I need to achieve? 
• How long will I need to invest? 

For example, let's say you've already saved $20,000. You commit to saving an additional $1,000. At an 8% annual rate of return, it'll take you 24 years to reach your goals.

If you want to earn $1 million sooner, what will you have to do? Let's say that you've saved that same $20,000. How long will it take you to get to $1 million if you save $2,000 per month at 10% annual rate of return? It'll take 15.75 years.

Are these simplistic equations? Yes. (The stock market won't always deliver exact returns, fees can eat up your money, etc.) However, you can plan better for your first $1 million if you dig into the numbers and set specific targets.  

Culprit 2: If you have a business, your expenses eat up your revenue.

We can all acknowledge different ways to earn $1 million. You can earn it slowly by investing over time or earn it all over the course of a year. 

However, if you run a business, you may not keep most of that money due to paying out the nose for your expenses. These expenses can run the gamut, from paying your employees to buying new computer paper for the printers at work.

Costs matter a lot, and you need a plan to lower your expenses so you can guarantee what you're putting into your pocket. Try a few things to lower your expenses: 

• Consolidate your purchases. Try to negotiate prices for the purchases you have to make. For example, try to keep all of your office purchases within one vendor. It can save you thousands. In addition, encourage vendors to compete for your business.
• Instill fiscal discipline in your employees. You can make fiscal discipline become a core value of your company. You can even reward your employees for saving the company money.
• Outsource work to independent contractors. Not only can you negotiate a lower rate with consultants, you'll also tap into varied experiences in consultants' fields of expertise.
• Save on marketing and advertising costs. Consider abandoning regular marketing techniques in favor of inbound marketing. Use SEO techniques on your company website and create YouTube videos instead.

Do everything you can to trim your expenses so that means you get closer to your $1 million goal. Seems like obvious advice, right? However, it's really easy to quit monitoring the little expenses, especially after a few years in business.

Culprit 3: You employ a start-and-stop approach to investing.

How consistently do you invest? Maybe you had great intentions of starting your 401(k) at work. You did — and then you left your job. It might seem harder to start up your investments again at a new job. Maybe the paperwork is harder to access. Maybe the HR department never seems to have any availability.

Or maybe you quit saving for one month because your refrigerator went kablooie and you needed to buy another one. The next month, you thought, "Gosh, it was nice to have that extra cash." So you didn't start saving again till six months later. 

Stopping and starting over and over or worse, missing years of saving could also impact your overall growth. You could sacrifice thousands of dollars in that time that you miss. (If only people could walk around seeing that figure plummet in a life-size holographic image over their heads constantly…)

Culprit 4: You don't track your progress. 

The best-laid plans… sometimes go awry. You never know what will actually happen with your investments, particularly if you end up with a couple of twists along the way. 

Maybe your investment choices don't really jive with growth. Maybe you had great intentions to check you nest egg every six months… and didn't. You might find yourself dismayed that your accounts haven't rocketed to $1 million like you assumed.

If you discover that your plan isn't anywhere near what you'd anticipated, don't panic. You can still reach your goal — you just might have to ramp up your investments, choose new ones or employ a completely different strategy.

Get someone on board to help you. Many millionaires don't go it alone. They often hire tax advisors, financial advisors and other professionals to help them manage their earnings.

(Just make sure you ask about the fees they charge and whether or not they are a fiduciary — someone who has your best interests at the forefront.)

Culprit 5: You underestimate the amount of time it takes for your money to compound.

This one has to do with the long, hard slog. When you're starting from $0 (which is where a lot of people start), it requires a huge amount of money to get there. (Obviously.)

For example, at 8% annual returns, $10,000 invested annually will become $518,914 after 20.5 years and $15,000 invested annually will become $778,371 over 20.5 years. On the other hand, $20,000 invested annually will become $1,037,828 over 20.5 years.

That's a long time. It takes time. It's easy to get tired of watching sloooow progress, but keep it up.

Stick With It and See Growth

Even highly disciplined individuals may feel exhausted by how hard it can seem to get to that first $1 million. The reality is that even if you save $10,000 or $15,000 a year, it can still take years and years to make it there.

In addition, life happens, and that can get in your way as well. However, take advantage of what you can control. Have a plan, cut expenses if you have a business, stay with it and review how well it's going at regular intervals.