How Hard Is It to Become a Millionaire?
This post is about how hard is it to become a millionaire.
Becoming a millionaire is extremely hard, however there are 5 steps you must take if you truly wish to become one.
Whenever you meet people and talk about money, how often do you hear the following:
“I just want to be rich!”
“I just want to be wealthy!”
“I just want to be a millionaire!”
Sure, I want these things too, but saying them and actually doing them is two different things altogether.
As the saying goes “if it was easy everybody would be successful.”
The fact is, it is not easy to be successful, and it certainly is not easy to amass a fortune of wealth, especially all on your own.
If you are born with a silver spoon in your mouth, then sure I guess you got a head start that most would only dream about in life.
But what about the people with nothing, no education, no contacts, living in poverty?
What about the people who want to make it all on their own?
Is it harder for them?
Of course, it is.
If you want to be a millionaire full stop it is difficult, it is hard, and anybody trying to tell you that it is easy or you can do it quickly are basically trying to scam you.
Now I am not a millionaire, but three of my closest mentors and friends are.
So before writing this post I sat down with them and asked them how hard it was to become a millionaire.
The interesting thing about these three successful men is they are all roughly the same age, all self-made and all came from a poor and uneducated background.
But these men are in their 60s, and they have worked EXTREMELY hard to get to that wonderful status of “millionaire.”
Before I reveal their advice, I want to ask you a few questions:
Why do you want to become a millionaire?
Is it so you don’t have to work again?
To show off?
To attract friends and lovers?
To provide a comfortable life for your family.
Become extremely specific and clear on WHY you want to become a millionaire but try to keep it as non-superficial as possible.
I am not suggesting for you to not enjoy the finer things in life, it is just if you want to become a millionaire to sit on your backside and never work again then I would not be surprised if this dream never works out for you.
Here are 5 steps to becoming a self-made millionaire:
#1 – Make a Financial Plan
Life without a plan is a complete utter mess.
Let us start from the very beginning, what constitutes a millionaire?
In simple terms a millionaire is a person usually with a net-worth of over $1,000,000 or whatever currency equivalent.
Here’s an easy way to define net worth: It’s what you own minus what you owe.
If that amount ends up being $1 million or more, you are a net-worth millionaire.
That does not sound as sexy as how the rappers make it sound now is it?
But let us say you still want to have a net-worth of over a million dollars.
How are you going to do that?
What are you going to do to get there?
It is so easy for people to just say “I want to be a millionaire,” and not back it up with any ideas, plans or logical thinking.
Here is one people often say “I want to be a millionaire by the age of 40,” yet they are working a dead-end job on a low salary, they hardly save any money and they are crippled by student loans and credit card debts.
Your best bet if that sounds like you is to try and win the lottery.
That is why hopefully if you are serious about this goal is to start making a proper financial plan from today.
Write down all your expenses, all your income and work out exactly how you are going to get to your net-worth of a million dollars.
What is it specifically that you can do?
Is it to start a business?
Is it to get a promotion?
Is it to sell your house and downsize?
Is it to get a second job?
Is it to invest in the stock market?
Is it to buy real estate?
Therefore, you must seriously think about how you are going to get there, and here is some unfortunate news for you especially if you are just starting out: it won’t happen overnight!
#2 – Clear Your Debts
Remember we are aiming to become a net millionaire here, not a millionaire with a mountain of debt attached to themselves.
That is why you need to start clearing the debts that are keeping you poor.
Before we do so there is a mindset change you must implement immediately.
It does not matter why you are in debt.
It does not matter how you got into debt.
And it does not benefit you dwelling on the fact you are in debt.
Just come to terms and accept it and make it your goal to clear and remove your debt so you can become a net millionaire.
Most people who clear their debts and become wealthy often say, “I had to experience the pain of losing all my money and going bankrupt to really appreciate the true value of money, it was a harsh lesson worth learning.”
So, you need to start viewing your debt as the harshest of lessons when it has come to money, and you need to move on and started thinking positively.
I knew a woman who amassed a $50,000 debt to her name, and she had no idea how to clear it and was utterly miserable.
She was overspending on clothes she did not need.
Without a clue how to fix her problem she realized she could sell the clothes back and it would clear off a huge percentage of her debt.
Sure enough she managed to be debt free in 5 years, and now is in a better financial position than she was before!
Remember the quicker you remove debt, the faster you will become a millionaire!
Here are some ways you can remove your debts quickly:
Pay more than the minimum payment.
Reduce your outgoings
Start a side hustle
Sell unused junk and old clothes etc
Shop nonbrand grocery items
Downsize your home
Sell your car if you cannot afford it
Drop expensive habits
Do NOT gamble
Check for old direct debits
Cancel pricey memberships
#3 – Save!
“Never spend your money before you have earned it.”
One of the hardest things most people have who don’t even want to become millionaires is the mere discipline of saving money.
In fact, a recent study showed the average person had only $500 in their bank accounts.
How can anybody propose to become a millionaire with only 0.0005% of that amount in their bank accounts?
The answer is they cannot.
But the people who are frugal, the people who are shrewd, the people who are not wasting $10 a day on their coffees can save enough to hit that wonderful target.
Look at this example below:
This is How to become a millionaire in 15 years with no savings:
With a 4 percent rate of return: $4,075 per month
With a 6 percent rate of return: $3,500 per month
With an 8 percent rate of return: $2,945 per month
So, I have calculated the above figures based on the average person aka the people who have only $500 to their name.
Even them, yes, the people with no savings whatsoever can amass a million dollars net worth in 15 years’ time.
And if you cannot afford to save that much double it, so you can be a millionaire in 30 years’ time instead of 15.
My point is you will not become financially free at all if you spend like the money is burning a hole in your pocket.
I know what that is like, because sadly I was that type of person.
I was the type of guy the second I got paid it was already spent.
I was the guy who had no idea what was coming in, and absolutely no idea what was going out of my bank account.
Therefore, if you want to become a net millionaire you need to start saving today.
In your written financial plan write just how much you are going to need to do this.
Is it 10%?
Whatever it is calculate it and write it down and start practicing the discipline of saving money now, so you can bargain with your future to become a millionaire.
#4 – Invest in What You Know
Warren Buffet is one of the most successful billionaires and investors the world has ever known, and he has a simple philosophy:
“Invest in what you know.”
What does this mean?
It is quite simple, it means do not put your money in something you know nothing about, otherwise that is very unwise and risky.
Millionaires are risk takers, but they are calculated risk takers.
Here are two contrasting examples.
A man I know bought himself a house in an extremely poor area of London.
It was a mess, it needed work, but the price was incredibly good.
He invested in it 15 years ago, did the work and has rented the house out for all that time, in fact he has never had it empty!
Sure, enough he got it valued recently and the house had trebled in value!
The area was now thriving, and no longer as desperate and poor as it was before.
In just 15 years he trebled its value too!
Now here is another example.
Another guy I know had a reputation of being a fool with his money, fast cars, gambling, smoking, expensive restaurants.
The sort of guy who loved to brag and keep up with the joneses.
But one day he took a huge amount of money and got on a plane and invested in an obscure country which shall remain nameless.
He invested ALL his money in some land and some houses.
Why did he do this?
Because it was cheap, and he got tipped off by a random guy on the internet.
This foolish guy lost all his money, the land to the government as the real estate he bought was not legal and cannot even do anything about it.
This may seem like an extreme example but invest in WHAT you know.
I know nothing about the following:
Stocks and shares
So therefore, I will not be investing in them because I do not know anything about them.
However, if you do, then invest in what you know and think 15 years plus minimum on what it will be worth by that time!
#5 – Have Multiple Sources of Income
To finish this post, I have gone back to the three self-made millionaires who gave me their advice on this very subject.
What was one thing they had in common?
They had multiple sources of income!
They did not have just one asset producing them money, they had several.
They never had just one business.
One payment method.
One real estate property.
They had multiples!
That is one of the easiest and most simple ways for you to become a millionaire!
Spread your risk, and do not put ALL your eggs in one basket!
Two men I knew started out at the same time in business.
One of them started creating multiple businesses and investments.
The other guy worked for 20 years in his one business which was a clothes shop.
The guy who had multiple sources of income became a multi-millionaire.
And the other guy who stuck to his one business?
Because he never did anything else his clothing shop was out of touch to compete with online stores and too expensive to run so he had to close, leaving himself with nothing.
“If you are born poor it’s not your mistake, but if you die poor its your mistake.”