So you want to be a millionaire

It also doesn't mean you should race to be debt-free at all costs. Most people, for instance, will be much better off if they use extra cash to beef up their retirement savings rather than paying down low-rate, deductible mortgage debt.

But it does mean you should avoid high-rate debt and be cautious about your total debt load. Keeping your housing expenses to 25% of your gross pay, for example, will help ensure you've got enough left over to fund your other goals and have some fun once in awhile.

We chose an old-fashioned, 30-year, fixed-rate mortgage because the low payments allowed us to invest more for retirement while still allowing us to gradually pay off our debt. I'm not saying it's the best mortgage for everybody, but it's working for us.

Own a house -- and don't waste it

There's no question that owning a home in Southern California got us to the million-dollar mark a few years earlier than I'd projected.

But I've lived through a couple of real-estate recessions and know that home prices can drop as well as climb. That's why I've valued our home conservatively for our net worth statements, and why we've avoided tapping our equity for frivolous spending.

Despite the ups and downs, owning a home has long been the cornerstone for wealth for most people. Consider:

• The median net worth of all homeowners in America in 2004 was $184,400. For renters, it was $4,000.

• Among the richest 10% of households, 96.9% are homeowners, compared with 69.1% of all households.

• Among that richest 10%, primary homes account for about a quarter of the median net worth.

Homeownership isn't a no-brainer. You can always mess up by buying more home than you can afford, draining your wealth away with home-equity loans or trying to speculate in an unstable market. But for most people in most circumstances, owning a home is a smart long-term strategy.

Invest in yourself

Other couples talk about the kids, or the boss, or the neighbors. We do, too, but you'll also catch my husband and I talking about "developing new revenue streams."

We've discovered (duh) that it's easier to meet your goals, and have money for fun, if your income is rising. So we've invested in education, launched our own businesses and looked for new ways to generate cash. In today's ever-changing economy, you have to be ready to learn new skills and take new directions.

My husband, an artist, has retooled several times as technology transformed his fields of commercial illustration and animation. I went to night school to complete the Certified Financial Planner training program and watched my pay double, and then double again, in just a few years.

Our businesses, which were both started as sidelines to regular W-2 employment, also have added to our income. Running your own show can be risky, but done right it can be a great way to build wealth. Indeed, most of the people interviewed for "The Millionaire Next Door" owned their own companies. According to the latest Fed numbers, 40.8% of the richest households had some equity in a business (the median value was $527,400).

Finally, and maybe most importantly: My husband and I don't live just for tomorrow. Our long-term goals are important to us, but we also want to enjoy life today. The fattest bank account in the world wouldn't be worthwhile to us if we didn't have a chance to enjoy each other, our daughter and our lives. So we appreciate the financial mileposts when we achieve them, but we know there's more -- a lot more --to life than money.

Liz Pulliam Weston's column appears every Monday and Thursday, exclusively on MSN Money. She also answers reader questions in the Your Money message board.

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