What does the phrase “To make your first million” mean?
"I'd interpret it as ""Net Worth"" reached 1M where ""net worth"" = assets - liabilities." I've not heard it used in any way other than one's net worth reaching a million.  No 30 yr old lawyer brags that his cumulative income just passed $1M because he may not have saved a dime of it. When people are crowing about their achievements, they often take liberties with those achievements. Vitalik's interpretation -- net worth, is probably what you would naturally come to mind. But when someone is bragging, that could mean anything -- $1M of total revenue.
As an advertising slogan, it generally implies saving monthly into an investment account. If you do pay yourself first, basically making saving/investing part of your budget, the intent is that you won't get to the end of the month with nothing left to save, because you will have already done it. I once had worked for Koch Industries. I attended a meeting in which Charles Koch said 'do well so that you can do good'. I like that philosophy. It means make money (even if it is from 'bad' companies) so that you have the means (money) to do good things for others. Bill Gates has made money and is now trying to do good with it.  You have better control of how your money is used if you manage it yourself. If you let some faceless company manage it you are never quite sure that they are really helping others. "I'd ask what your goal is.  I was definitely on the path, and for one reason: to make piles of money.  After some years in I decided to jump shit and get an MBA. Then the market went into freefall. Guys who paid their dues got fucked huge.  Finance isn't the only way to get rich. It's one way, and it seems like the ""easy"" way. Do x-y-z and jump through the hoops and you are on the path.  I'd suggest that if the money is really your true motivation, then there are other ways." 10k in taser stock at $1.00 per share made those who held into the hundreds per share made millions.  But think about the likelihood of you owning a $1 stock and holding it past $10.00. They (taser millionaires) were both crazy and lucky.  A direct answer, better off buying a lottery ticket. Stocks are for growing wealth not gaining wealth imho. Of course there are outliers though.  To the point in the other answer, if it was repeatable the people teaching the tricks (if they worked) would make much more if they followed their own advice if it worked.  Also, if everyone tells you how good gold is to buy that just means they are selling to get out. If it was that good they would be buying and not saying anything about it. Stay in school, learn everything you can, and spend as little money as possible.  And realize that the chances of you dropping out and becoming a millionaire are much lower than the chances of you staying in school and becoming a millionaire.  You're unlikely to be a good investor if you make bets with negative expected payoffs. "&gt; Because: people with lots of money don’t spend it. They just sit on it, like Smaug in his cave.  Do they actually sit on cash - or are those ""money"" invested into factories and companies?  When you have more ""money"" than you can spend in a lifetime, those are not the same ""money"" you had then you were struggling day by day - they are power and control over livelihoods of others, and not your own livelihood...  People with money are like politicians that no one voted for but that were elected nonetheless." Easy. Start with 2 millions and lose only one. Jokes aside, if you want a million USD, you should be asking yourself how you can produce products or services worth $5 millions. (expect the extra to be eaten up by taxes, marketing, sales, workforce...) If by investment you mean making risky bets on the stock market, you might have a better time going to Las Vegas. On the other hand, if by investment you mean finding something that will produce $$$ and getting involved, it's a different matter. Keep in mind that it's a cliche statement used as non-controversial filler in articles, not some universal truth. When you were young, did you mom tell you to eat your vegetables because children are starving in Ethiopia? This is the personal finance article equivalent of that. Generally speaking, the statement as an air of truth about it. If you're living hand to mouth, you probably shouldn't be thinking about the stock market. If you're a typical middle class individual investor, you probably shouldn't be messing around with very speculative investments. That said, be careful about looking for some deeper meaning that just isn't there. If the secret of investment success is hidden in that statement, I have a bridge to sell you that has a great view of Brooklyn. "My family instilled in me early on that hard work was important, and the output of that work was its reward. My grandparents really made in impression with me about telling the truth and being fair (probably after I was busted for lying and cheating about something) -- I remember my grandfather talking about the solem trust associated with shaking hands over something. I remember opening a savings account at school on bank day and being really excited about the interest accruing... but my folks never really allowed us to spend it on toys or other stuff. I didn't really think about money at all until I was probably about 10 or 11, when I started watching ""Wall Street Week"" on PBS with my dad on Friday night and bombarding him with dozens of questions. Then games like Sim City really got me going... my grandmother was always amazed that I was talking about bonding construction projects. I think that before 10 or so, kids needn't concern themselves with money, but should understand responsibility, the rewards that come from working hard, and the consequences for not doing so." Millionaire, Shmillionaire! Let's do this calculation Bruno Mars style (I wanna be a Billionaire...) If my calculations are correct, in the above scenario, at age 80, you would have more than a billion in the bank, after taxes. "The ""coin flip"" argument made in the article is absurd.  My old boss had a saying, ""the harder I work, the luckier I get.""  He came from nothing, worked maniacally to become an Olympian, and later in life became a multi-millionaire.  This is a common story among self-made people.  I DO think that the rich have significant advantages:  education, contact networks, access to startup capital, etc.  These are very helpful, but don't assure success.  Their lack is not insurmountable by the ambitious.  I also think those advantages have expanded in recent years.  Monetary policy has resulted in a large pool of investable funds being made available to to the financial sector, who earn high incomes with rent-seeking tactics." &gt;It's called lacking empathy and compassion.  Or people like to keep their hard earned money. Don't paint somebody as greedy for trying to keep what they have earned.   &gt;Until you've walked a mile in another person's shoes, it's hard to know what they've gone through and what they battle.  Everybody faces their own challenges in life, successful people don't let them become excuses. To me, the most important thing for young people to learn about personal finance is the connection between service and income.  Most, rightly look for a way to earn money and advance the lifestyle of their home life.  How does one do that?  Grinding it out in a 9-5 does not seem attractive while living the lifestyles of those on TV would be awesome.   The temptation is to try all these tricks to get money, but absent from their plan is how they serve their fellow man in order to receive that money. Stars, like the Kardashians are a marketing machine despite the carefree life displayed on the TV.  They have served many budding companies well by selling their products to certain demographics.  Most young people do not make that connection.   So they try things like trading Forex, gold or whatever the latest thing is.  It does not work as there is no service to their fellow man.  They get a job at a fast food chain and complain about their pay in accordance with their work.  Well sure, but again they are serving such few people that one can only expect a small income.   The better and more people one can serve, in general, the higher a person's income. Yeah $1M is a number that a very, very select number of programmers are making. It's not really within the realm of possibility for the average person - you have to be a combination of obsessed, brilliant, and lucky to have coordinated with the right people.      Now $100-200k? Yeah, definitely. "There could be a few reasons for this, my first guess is that you didn't report the distribution on your return (indicated on line 15 of your 1040, pictured below), the IRS got a copy of the 1099-R, and assumes it's all taxable (or maybe the 1099-R indicates the full amount is taxable). If a 1099-R doesn't have an amount populated for 'taxable amount' it doesn't mean the distribution isn't taxable, and without any indication that it's not taxable the IRS assumes it is. It's not taxable if it's a withdrawal of your contribution. Here's a snippet from How to Calculate the Taxable Amount of an IRA Withdrawal: Withdrawals from a Roth IRA Since Roth IRA contributions are made on   an after-tax basis, qualified withdrawals are completely tax-free. A   ""qualified"" Roth withdrawal includes the following: If your 1099-R indicates a taxable amount, then you might need to contact the issuer to understand why. If it does not indicate a taxable amount and you failed to record the distribution on your return, you just need to file an amended return that shows the distribution on line 15a and shows no taxable amount on 15b along with a completed Form 8606.  You may not need additional documentation to support of your claim that it's not taxable, but if you do it would be any statement showing that your contributions over the years exceed your withdrawal. What a 1040 with a non-taxable IRA withdrawal would show:  Note: There'd also be a completed Form 8606, the 1040 lines above just show if it was entered in. The easiest path forward is probably to file an amended return using turbotax since you filed with them originally. I haven't dealt with an IRS letter in a few years, I can't recall if you need to contact them or simply file the amended return, but they're pretty good about including instructions so the letter probably indicates what you need to do. Don't delay in taking action, as the IRS can and will garnish wages if they are owed (or think they are owed) money.  Update: OP contacted IRS and they didn't even want an amended return, just the completed Form 8606, so it's worth calling the IRS first with these letters."