5 Ways To Become a Millionaire as a Nanny

Many Americans dream of financial freedom by becoming a millionaire. Although 2023 Schwab survey respondents said that it takes an average net worth of $2.2 million to be considered wealthy, the million-dollar mark remains a benchmark of American wealth and is achievable with the right strategies in place.

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Like any occupation, becoming a millionaire as a nanny is attainable with proper financial planning, disciplined saving and investing and continuous self-improvement. Nannying can provide a sustainable and financially fulfilling career by building a wealth of experience , developing unique skills or certifications, and seeking out reliable, high-salary jobs with benefits.

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How To Maximize Your Earnings as a Nanny

According to Care.com’s 2024 Cost of Care survey , the average nanny makes about $766 a week in the U.S. caring for one infant (about the same as for two toddlers or children). That works out to about $19.15 per hour, just shy of $40,000 for the year.

However, what you bring to the table is directly related to your earning potential as a nanny. Many families are looking for nannies who can provide around-the-clock care, additional schooling to their children and specializations, like newborn care and child development training or languages, not to mention demanding hours, overnight, and travel with the family.

Talented nannies can command between $25 and $40 an hour, but those with expertise in newborn care, lactation education or special needs, for example, can make double that. Nannies with higher education can usually charge more, especially if the degree is related to child care (e.g., child psychology or early childhood education).

“As a nanny you have to have those specialties and you have to continue your education,” award-winning nanny Heidi Joline told CNN. “In other places, it may be fine to just have CPR training, but if you’re in the bigger markets, where you are expecting higher pay and working with higher-profile people, you need specialized skills to stand out.”

Degrees look good on paper, but getting a good rate from your employers depends on your rapport with children and your work. If you’re extremely accommodating, go above and beyond the basic job expectations and be willing to do tasks outside of childcare help, you’ll be highly admired and well compensated.

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How To Become a Millionaire as a Nanny

Families are demanding more from childcare professionals, and they’re willing to shell out for them. A new breed of highly educated and well-trained nannies work hectic schedules that require them to be on the clock during odd hours. As a result, they are changing the way people value child care and more are making six figures easily.

According to CNN Business, nannies in New York City, Los Angeles and other big metropolitan areas earn between $150,000 and $180,000 per year, and those working in California’s Bay Area can make up to $220,000. It takes a certain level of wealth to afford a nanny, and rich families or celebrity clients will pay handsomely for those who transcend sometimes demanding expectations.

If you’re lucky to land a nanny job worth $100,000, you’ll have more money to save and invest . But even if you’re making around $50,000 annually as a nanny, you can still grow your wealth and reach millionaire status by maximizing your earnings, managing expenses, investing wisely and leveraging additional income streams.

Maximize Your Earnings

If you earn $50,000 annually as a nanny, build your resume to include coursework and specializations prized by families and command higher rates. Seeking out work for high-net-worth families willing to pay premium rates for exceptional care is also possible. In fact, elite nanny placement agencies match high-profile families with professional nannies.

Save Aggressively

An aggressive savings plan is a strategy for saving a significant portion of your salary. If you want to become a millionaire quickly, it will take a plan to save and invest 50% or 60% of your take-home pay. If you are making $50,000 as a nanny, 30% of your income saved — $15,000 per year — should be adequate to start wealth building.

Invest Wisely

Before you decide what you can afford to put aside for investments , you’ll have to deal with paying off debt like credit cards and student loans and starting an emergency fund. If a decent average annual rate of return (AAR) is 10% on investments (especially in your retirement portfolio), you should start investing your savings with a more modest 7% AAR.

Build Additional Income

The decision to become a nanny is sometimes made with the knowledge that your compensation will be significantly lower than what you are actually worth. But until you can demand a higher salary, you can maximize your earnings by having a side hustle . And there are plenty of opportunities to work as a nanny.

For example, speaking to CNBC Make It, Brieonna Johnson makes about $175,000 a year working a full-time nanny job in New York, part-time for a family in Atlanta (on off-weeks from New York) and occasional side jobs as a travel nanny and newborn care specialist. You’ll fast-track your wealth by generating an extra $10,000 per year in supplemental income streams (e.g., after-hours child care, respite help, tutoring).

Take Advantage of Compound Growth

Unless you’re in a hurry to flash your status symbols around town, you should set a target timeframe of between 20-25 years to become a millionaire. Using consistent savings, investing and additional income, you can reach millionaire status in approximately 20-25 years, depending on investment returns and how you manage your spending.

This article originally appeared on GOBankingRates.com : 5 Ways To Become a Millionaire as a Nanny