So You Want to Be A Millionaire? Here Are 5 Tips to Get You There
For many people, becoming a millionaire seems like a fantasy that could never possibly be achieved. However, with hard work, smart investing and financial guidance, one day you too could become a millionaire. Read on for more tips on how you can make it to the seven-figure club.
1) Make a Budget
The best first step when creating any kind of financial plan is to create a budget. While creating a budget won’t make you a millionaire by itself, it will allow you to see where your money is going and how you can streamline your finances to save and invest more each month. If you’re truly motivated to become a millionaire, you’re probably willing to give up expensive lattes and cut back on eating out if it means those extra dollars could be put toward your financial goals.
Once you have identified where your money is going, start fresh with a new budget that includes saving and investing your money. That includes finding ways you can reduce other costs—such as cable or streaming services. Do you really need Netflix, Hulu and HBO? Or maybe you belong to other subscription services or a wine of the month club. Are those things you really need, or can you make some concessions for the sake of your budget (and future?). Another area where people don’t often realize they are spending a lot of money is on utilities. Check your water/gas/electric bill and really look at how much you could be saving by turning the lights off, taking shorter showers, and even turning the water off while brushing your teeth. These may seem like tiny, insignificant changes—but as any millionaire can tell you, it all adds up.
2) Pay Off Debt
For anyone aspiring to become a millionaire, getting rid of debt is a crucial step. When you have debt—such as a vehicle loan, student loans, credit cards, mortgage, etc.—you are essentially giving away money because you are paying interest. Sure, banks and finance companies need to be paid somehow—but not by someone who wants to grow their wealth into the millions!
As part of your budgeting in step one, you outlined your monthly bills and expenses. In those monthly bills were your debts, but did you really analyze them? Try this exercise: write down all of your debt and then write down what you pay each month and how much of that payment is going to interest vs. the principal amount of the loan. Depending on your interest rate, you could be putting that amount each month towards savings or investments and getting paid interest and dividends instead of paying that to someone else. By getting rid of debt, you can stop the cycle of never-ending payments and use that money to start building your millions. Many people have just accepted that this is how it works: You need a car? Get a loan. You need a house? Get a loan. And so on and so on. But the secret to becoming a millionaire is realizing that it doesn’t have to work that way. Sure, you might not have the newest car (because you paid cash) or the fanciest house (you don’t want to be house poor) but you know where you want to end up, and it’s not in debt.
3) Start Investing
This step can be intimidating to some, but it doesn’t have to be. Investing for everyday people has become so more accessible in recent years. The best first step is to become educated. Read up on different ways to invest. Maybe real estate makes the most sense for you, or perhaps the excitement of the stock market calls to you. Whatever you decide, you can start small and work your way up to an expert investor (Warren Buffet watch out!). The best part? You don’t have to go it alone. While becoming knowledgeable yourself is a great first step, there’s no substitute for sound, personal financial guidance. Financial advisors spend their days looking out for the best interests of their clients. They’re constantly becoming more educated on economic trends, federal tax law implications, and the volatility of the market. They can advise you on the best place to start with investing, which is different for everyone. They can take your goal of becoming a millionaire and set you on a path to achieving it. Knowing you have someone in your corner can be a huge asset to any aspiring investing tycoon.
4) Find Your Passion
We’ve all heard the phrase “If you love what you’re doing, you’ll never work a day in your life.” And the general idea to that sentiment holds true for most millionaires. Finding your passion is one thing—it’s finding out how to make money from it that can be the real challenge. But that doesn’t mean it’s impossible. Your passion project might be just that—a project or hobby you enjoy outside of your work hours. But what if you could find a way to turn your passion into your income, and ultimately your millions? For most, the answer was to create something new or take something that exists and improve it. Keep working on what fuels your passion. Even if it’s not the key to your financial success, it’s a great way to ensure you don’t burn out on the way to your millions.
5) Don’t Give Up
Unless you win the lottery or get some other kind of financial windfall, becoming a millionaire doesn’t happen overnight. Anyone who tells you different is lying (and you should not buy whatever they’re selling). It’s in every way a marathon and not a sprint. Sure, you’ll make mistakes along the way, but the key is to learn from them in order to not repeat them.
What’s something a lot of millionaires have in common? They didn’t start out that way. Some of the best rags to riches stories of well-known millionaires (and billionaires) involve people who came from very little and never gave up. Keep your eye on the finish line, and remember you can become a millionaire, too!