Content of the material
- The Best Ways To Become a Millionaire
- 1. Fall in Love With Your Work
- 2. Get Out of Debt
- 3. Start Saving
- Good To Know
- 4. Cut Down on Expenses
- 5. Work With a Financial Advisor
- 6. Invest Early
- 7. Invest In Real Estate
- Benefits of Owning Real Estate
- 8. Generate Multiple Income Streams
- 6. Start your own business
- 6. Keep Your Millionaire Goal Front and Center
- Surprisingly Simple Ways to Become a Millionaire
- 1. Work smarter and harder than your competition.
- 2. Learn from your mistakes and move on.
- 3. Build something new that you would love – and be sure to experiment.
- 4. Learn to budget – or at least get help doing so.
- 6. Don’t believe discouraging people.
- 7. Save some of your income for a rainy day.
- 10. “Think and Grow Rich” by Napoleon Hill
- Don’t forget to build your millionaire advisory board
- Method #5: Invest In Real Estate
- 8. Build a strong support network
- 8. Put Your Plan on Repeat
The Best Ways To Become a Millionaire
There’s no shortage of advice on how to become a millionaire, including courses that claim to show you how to become a millionaire. And while it is possible to gain millions of dollars quickly, it’s not probable. You’d have to receive an unexpected inheritance or buy a lucky lottery ticket.
If you’re looking for advice on how to become a millionaire overnight, you won’t find that here. Instead, here are some solid ideas to get you started on your path to riches.
1. Fall in Love With Your Work
To get rich, you’re going to have to work for it. Choosing work that’s deeply meaningful to you is likely to make those long hours as pleasurable as they are lucrative. When you love what you do, you’re more productive, engaged and connected at work. All of this can lead to greater success.
2. Get Out of Debt
Debt is dangerous if you want to be a millionaire. At best, it robs you of opportunities to save and invest. At worst, it can create financial chaos that can take years to escape.
For example, using a credit card to pay for purchases is convenient — and might even earn you a small amount of cash back or reward points that save you money. However, charging $5,000 at 16% APR would cost $3,140 in interest and take you 82 months — or almost seven years — to pay off if you only pay the minimum payment due each month of $100.
Find Out: 65 Splurges of the Filthy Rich
3. Start Saving
The formula for building wealth is simple: Save more and spend less. You can become wealthy over time if you do nothing more than saving diligently and investing wisely. But you have to do it.
Good To Know It’s important to live within your means, but that doesn’t mean you have to spend all the money you have. As your income grows, avoid the temptation to buy more. Every dollar you spend is one less dollar working for you.
Insured savings accounts through a bank or credit union are safe places to keep — and build — your savings. Choose a traditional savings account, money market account or certificate of deposit with an interest rate that compounds monthly. For best results, shop around to find the highest return on your money.
4. Cut Down on Expenses
Eliminating unnecessary expenses is another way to accumulate the wealth of a millionaire.
The more money you trim from your budget, the more money you have to save and invest. For example, instead of borrowing money to buy a car, you could purchase one with cash. Then you — and not the bank — get to use the monthly payment to make more money.
5. Work With a Financial Advisor
A financial advisor may be just what you need to guide you on the path to becoming a millionaire. These professionals can help you define your financial goals and steer you toward the best investments to reach them.
You should interview potential financial advisors to make sure they’re a good match for you. Choose someone who operates as a fiduciary. This means they must act in your best interest instead of their own or their employers.
Here are a few additional questions to ask potential financial advisors:
How are you compensated?
Are you held to a fiduciary standard at all times?
Do you provide comprehensive financial planning?
6. Invest Early
While you may be interested in how to become a millionaire day trading, that’s not the path to millions for most. It’s extremely risky, time-consuming and stressful. Plus, it can result in catastrophic financial losses.
Instead, the more time you give your investments to work, the more money they can potentially earn. Compound interest — interest earned on the principal plus the interest you’ve already earned — is a powerful tool in your financial toolkit.
If you invest $25,000 in an account that earns 3% interest compounded monthly and don’t invest any additional funds, you’ll have $45,518 in 20 years. Leave that money in the same account for 30 years, and you’ll have $61,421.
7. Invest In Real Estate
For many Americans, real estate is an essential wealth-building tool. Property values tend to increase over time, which boosts equity that you can later use. If you buy a house for $200,000 and sell it for $300,000, you’ve essentially earned $100,000 just by holding on to the property.
Benefits of Owning Real Estate Owning real estate also has other advantages. Rental property can generate income year-round. Real estate also comes with tax benefits that can add up to significant savings.
8. Generate Multiple Income Streams
Rich people diversify their sources of income. In addition to wages or salary earned from their primary jobs, they also earn money from investments and profit-generating side ventures like rental properties.
Passive income — money you earn without putting in much effort — amplifies your wealth building. It also provides a sense of financial security if one form of income dries up. Here are some ways to generate multiple income streams:
Invest in securities.
Buy real estate.
Start a business.
Offer your services as a consultant.
Create a product you can sell.
6. Start your own business
In their book “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy,” authors Thomas Stanley and William Danko say that two-thirds of millionaires are self-employed, and that entrepreneurs represent the majority of that group. The rest are professionals, such as doctors and accountants.
Entrepreneurs create most of the country’s wealth. One measure of that is the Forbes 400 list of richest Americans.
In 1984, less than half of the people on that list were self-made, Forbes notes, but by 2018, Americans who had built their own fortunes made up 67 percent of the list.
6. Keep Your Millionaire Goal Front and Center
The steps to becoming a millionaire are the opposite of how most people act, which means you’ll see friends and family going places, doing things, and buying stuff. And if you spend too much time focusing on what they’re doing, you could be in big trouble with your own money.
Almost half (49%) of millennials say they’re influenced by social media to spend their money.7 That means they’re letting someone else’s highlight reel on their social media feed decide how they spend their own money. No thanks! Don’t get sucked into comparison culture. Fight tooth and nail against it. Let’s just be real here: It’s time to stop buying stuff we can’t afford to impress people we don’t even really like!
Millionaires didn’t get where they are by playing the comparison game. Nope. Only 7% of them feel any pressure to keep up with their friends and families when it comes to spending.8 Instead, they stay focused on their own goals and don’t worry about what other people are thinking or doing.
Instead of obsessing over what you don’t have, focus on stuff that really matters —family and friends, your church, your career goals, the legacy you’ll leave your children. Those will bring you much greater joy than a brand-new car or a destination vacation ever could.
Surprisingly Simple Ways to Become a Millionaire
Simple tasks are not always easy tasks. If I were to hand you a spoon and ask that you dig a hole nine feet down into packed soil, that’d be pretty straightforward and simple but it certainly wouldn’t be easy.
Likewise, you’ll find some of these simple ways to be just that – simple but not easy. But come on, you’re tenacious enough for the job, right?
Jaime Tardy, author of Eventual Millionaire who has interviewed hundreds of millionaires has this to add , “One of the main traits of a millionaire is perseverance. The ability to KEEP GOING in the face of adversity even when the finish line is very far away.”
One last thing. Remember that many of these tips are surprisingly simple, don’t underestimate their effectiveness just because you’ve “heard that one before.” Put these babies to good use and watch your millionaire potential soar!
1. Work smarter and harder than your competition
Identify your competition. How hard are they working? What are some differentiators you can bring to your workplace or market?
Start by working smarter. There’s no use in working harder if your work isn’t effective at producing income – you’ll be spinning your wheels.
There’s no sense in selling ice cream cones on your front lawn in the dead of winter. Instead, set up a booth at the park in the sizzling summertime – you get the idea! Simple, commonsense changes can greatly improve your effectiveness.
Work harder than others are willing. We’ve all seen the guy or gal at the office who works harder than anyone else. Maybe they’re a little nerdy or a little too interested in their job – or are they?
Maybe they’re onto something. After all, aren’t they the ones getting the promotions? Aren’t they the ones who become the office linchpins?
I remember when began my career with A.G. Edwards & Sons in 2002, I was in a training class of around 55 people. After completing training a year later, our class was reduced to less than half. My fifth anniversary mark? Only five of us were left.
Most failed. Why? Because they weren’t willing to put in the hard work required.
I beg you to not be afraid of hard work. Not only will your boss feel better about what you’re doing for them – you will too.
I’m not afraid to die on a treadmill. I will not be outworked. You may be more talented than me. You might be smarter than me. And you may be better looking than me. But if we get on a treadmill together, you are going to get off first or I’m going to die. It’s really that simple. I’m not going to be outworked. – Will Smith, Actor
2. Learn from your mistakes and move on
Everyone makes them. I do, you do, we all do.
And believe me, I’ve made some pitiful mistakes.
Would you get suckered into two multi-level companies that go nowhere? Would you throw $8,000 into an online business venture only to lose it all? Those are just a couple of several investment mistakes I’ve made with my money.
Mistakes are difficult to swallow. I think our first gut reaction as human beings to the realization we messed up is to shift blame – to others or to circumstances.
The very best way forward is to admit we fumbled the ball. Are you willing to admit when you make mistakes?
Some people, when faced with their own inadequacies, beat themselves up. And you know what that does? It paralyzes them from making the decisions they need to make to achieve success.
It’s important to remember that . . . .
Only those who are asleep make no mistakes. – Ingvar Kamprad, Founder of IKEA
So, take the simple step to fess up and move on. Yes, it’s simpler than you think – especially once you have practice. If you are still in the middle of a debt mistake one of the best things you can do is to stop paying interest by transferring your balance over to a 0% APR credit card. This will free you up to hammer down on that debt instead of paying big interest payments.
Millionaires don’t give up because of a few silly mistakes. They press on toward the goal.
3. Build something new that you would love – and be sure to experiment
You can read book after book about how to research what your customers will love, and by the time you deliver it, they’ll already be bored with it.
If you’re the entrepreneurial type – I know I am – make sure to work on projects you can get excited about!
Chances are, if you create something that you’d use and love, others will too.
Millionaires understand that some of the best ideas don’t come out of costly research, they come out of a passion for making the world a better place.
Also, remember to experiment. Have fun! Some of my best ideas come out of experimentation.
In 1945, Percy Spencer experimented with a new vacuum tube while doing research for the Raytheon Corporation. He popped popcorn and melted a candy bar, and saw the great potential for this process which eventually culminated into the advent of the microwave.
Tim Cook, the CEO of Apple recently explained in an interview with Charlie Rose that it’s more difficult to edit than it is to create something entirely new. But I’ve learned that sometimes creating something new can be the best way forward to becoming a millionaire.
One of the things that I’ve been most excited about building is my blog. My financial planning practice was growing at a steady rate but after I launched GoodFinancialCents.com in 2008 my practice and revenue have grown significantly. Some of that is a direct result of getting new clients to my practice while the other more surprising revenue source has been directly from the blog.
A combination of advertising revenue and introduction to new business opportunities (because my name and face are all over the web) have been a huge blessing.
Here’s the thing you have to realize though: I KNEW NOTHING ABOUT BLOGGING.
That’s right. The launching of my blog was a total experiment and still is today. I’m always testing different ways to monetize and build my brand. Experimenting is the fun part!
You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new. – Steve Jobs, Former CEO of Apple
4. Learn to budget – or at least get help doing so
You know that I hate budgeting. Thankfully, my wife budgets like a pro.
Here’s a tip from one of the financial greats (a millionaire, to say the least):
Rule No.1: Never lose money. Rule No.2: Never forget rule No.1. – Warren Buffett, CEO of Berkshire Hathaway
If you don’t budget, I promise you’ll lose money to overspending.
Want to make yourself sick? Count up how much you’re spending on eating out, clothing, gadgets, and other delights and write it down. Then, start budgeting. After a year, look at how much you’re spending and compare with your initial count.
Yikes. Try not to lose your lunch.
A hugely important part of budgeting is ensuring you’re spending less than you’re making. And the only way to do that friends, is to track everything.
If you’re not a spreadsheets-kind-of-person, that’s okay. Just make sure you have some help.
6. Don’t believe discouraging people
As soon as you accept that you’re not going to become a millionaire, you probably won’t – you’ll settle for the ordinary.
Your beliefs about your future matter a whole lot, and will – in part – help determine your future.
After all, your beliefs affect your actions, and your actions affect your outcomes.
When you listen to discouraging people, you’re letting them accomplish their goal – to drag you down and ensure you don’t surpass their success. No good.
Instead, I suggest you prove them wrong – but be humble about it. Your results will speak louder than your words, I promise you.
I just love it when people say I can’t do it, there’s nothing that makes me feel better because all my life, people have said that I wasn’t going to make it. – Ted Turner, Founder of CNN
7. Save some of your income for a rainy day
If you’ve lived on this planet for any considerable number of years, you know that bad stuff happens.
Not only that, sometimes several bad things happen all at the same time. Talk about knockout power!
That’s why I recommend that you save some of your income for a rainy day.
Medical emergencies can last years.
Trees go through roofs.
Jobs can be lost.
Don’t get caught without an emergency fund. You hear?
What does this have to do with becoming a millionaire? I’ll tell you.
If you have an emergency and don’t have some liquid cash saved up in a savings account like one from Capital One 360, you’re likely to either go into debt (bad idea) or borrow from family members (very bad idea).
Don’t be the guy that owes his parents.
Don’t be the couple that drowns in debt.
Think of debt as the polar opposite of investing. Instead of you investing in companies, companies are investing in you – looking to make as much profit as possible by pulling it out of your wallet. It’s bad news people.
According to many experts, you should have around three to six months of expenses in your emergency fund – in bad times, I recommend you shoot for eight months.
10. “Think and Grow Rich” by Napoleon Hill
Goodreads Rating: 4.17/5 | Audible Rating: 4.5 stars
Originally published in 1937, this motivational book draws inspiration from business tycoons like Henry Ford and King Gillette to demonstrate the secrets to financial success. Hill claims that these secrets have generated wealth for many over the years and can bring you fortune if you are ready and know what you want.
Don’t forget to build your millionaire advisory board
If you need help building your plan or making decisions along the way, seek out professional guidance from a financial advisor. Financial advisors can act as a sounding board for your investment strategies, as well as offer advice on the pros and cons of various investment choices.
Continue to build your team of advisors with a certified public accountant who will help you navigate tax questions. As your wealth builds, it is possible that tax planning becomes more complicated. Not only can your CPA complete your tax forms, but they can also provide advice on ways to minimize taxes, which leaves more money for you to invest in your goal of becoming a millionaire.
With a growing net worth, you’ll also want to protect your assets with estate planning. An estate planning attorney will help you plan what to do with your money after you die. Proper planning can reduce estate taxes and leave more money for your heirs. If you don’t have heirs (or don’t wish to leave your wealth to them), an estate planning attorney can also help you donate your money to charities that support causes you believe in.
Method #5: Invest In Real Estate
The main problem with real estate investing is that it requires a lot of upfront capital to get started. As a result, if you are living paycheck to paycheck, investing in real estate may be out of your reach.
The only reason I became interested in real estate investing is because my parents put my brother and I through college (without going into major debt) with a few strategically placed housing investments.
In fact, my parents bought one property for each of us at a young age, held onto it for 15+ years and sold them off when it came time to pay for our college tuition.
Now the proper way to invest in real estate is beyond the scope of this post and if you are interested in learning more, I highly recommend that you visit Bigger Pockets.
But I want to say upfront that all of my real estate success has been almost 100% luck.
Because I live in Silicon Valley, which is one of the most ridiculous places in the world, the houses that I’ve purchased in the past 2 decades have increased in value many fold yielding well over a million dollars in appreciation.
Just like stocks, real estate investing is all funny money until you sell but there are a few things to be said about real estate worth mentioning.
One, real estate is an excellent hedge against inflation. The mortgage on your house stays constant (for a 30 year fixed loan) and due to inflation reducing the value of a dollar, the amount that you owe becomes less over time.
Two, if you plan on living in your house for the foreseeable future, it’s very difficult to lose money if you decide to buy vs rent.
My friends who have been successful with real estate on a large scale tend to buy income generating properties en masse and consistently trade up to larger properties over time by taking advantage of the 1031 exchange rule.
8. Build a strong support network
To get ahead, you've got to build as many allies as possible. Being a hard worker isn't enough. You have to talk to people, show an interest in them and get them to like you.
Once you have someone with significant power on your side, your entire career will advance much faster. I always made it a point to take a colleague out for coffee at least once a week. Building deep relationships helped me get promoted to vice president at 27.
8. Put Your Plan on Repeat
To become a millionaire, you need to let time and compound interest work their magic. It’s a beautiful thing. And if you want to hit your big financial goals, you have to stay focused on the tiny details over the long haul.
What are we talking about? Staying out of debt. Investing continually. Avoiding the “I deserve” trap. Year after year after year. Wash, rinse, repeat. And guess what? You’ll keep doing those things even after you hit that million-dollar mark, because that’s what money-smart people do. You keep on going!
And if you're looking to learn more, Dave's newest book, Baby Steps Millionaires, doesn’t just tell you what to do. It also tells you why to do it, how to do it, and when to do it. Grab a copy today to learn how to bust through the barriers preventing you from becoming a millionaire.