My Top 10 Ways to be a Millionaire
Lessons I Have Learned Over the Years that You Need to Know
Personally, I have had big dreams since I was a kid and eventually had goals to be a millionaire. Over the years I have made some money as well as made some mistakes. I don’t profess to know everything but have learned a thing or two along the way.
This article was going to be a lot longer but I scrapped the first draft. So here is the second draft since I decided to make this a little bit shorter and get right to the point.
There is no one size fits all to reach the 7 figure club. There are many ways to reach this level. Some are slow ways, investing in your retirement account for 40 years or so.
Other ways are faster such as creating a new product that you turn around and sell for millions. Basically, it all comes down to you and what you want to do.
The number of people who do reach seven figures is small. In the United States, for instance, only 3% reach the millionaire level according to a NY Post article.
I recommend following this in the order I list as best as you can. There are many obstacles you’ll face in life and sometimes make mistakes along the way. We’re all human so don’t feel too bad when you do. I do recommend if you make a mistake, not to make the same mistake twice. The second mistake could be costlier than the first mistake.
1. Set Your 7 Figure Goal
First, set your goal to be a millionaire or multimillionaire. If you don’t believe you can reach this level, then you possibly won’t reach it at all. You have to purposely make decisions in your life.
Don’t worry if you don’t make a lot of money. Even people who make less than $50,000 a year have attained seven figures in their portfolio. This all comes down to having a plan and sticking to it.
2. Learn How to Invest
There are several ways you can invest. You can invest in mutual funds, exchange-traded funds, stock market, bonds, precious metals, real estate, cryptocurrencies, which are the more popular avenues. Spend some time learning.
Just as you go buy something at a store, you are doing the same with investing. You can buy an investment but before you do, you should learn what does this investment do? What are some financial terms that are common in this sector? What is the price today compared to 10 years ago?
The more you learn, you’ll be able to ask better questions and could decide that this was not the right time to buy. Some investments can be considered expensive based on the cycle of the investment as well as your own personal beliefs.
There may be days, weeks, months, or years when an investment is overvalued. So you need to be patient and wait for the price to drop a bit. You won’t understand this at first, and it takes time to understand different cycles.
3. Read Investing Books and Magazines
This is similar to the previous tip but personally I think there is a goldmine of information in books and some magazines. Information is also online if you want a shorter or quicker version.
Personally I like reading a book and getting more details on what an investor has done, or what marketing strategy they use. A book has a wealth of information that you could refer back to or use to understand what to do in a situation if you’re not familiar.
4. Subscribe to a Financial YouTube Channel
YouTube has a lot of videos if you need a visual and want to hear what some investors and YouTubers are talking about. Usually, they talk about current topics or trends
. Maybe you just want to watch the financial news, Yahoo Finance and CNBC cover financial news. Whether you invest in one area or another, it is always good to have a general idea. Just be careful as even some YouTubers will sway you toward their investment since they possibly own the investment.
5. Pick a Path to Make Your Millions
Pick an area and learn as much as you can on this topic.
There is so much information available, some of which are free and others cost you a little bit of money. I would recommend not to diversify to other areas unless you are an experienced investor and really know what you’re doing. It’s easy to lose focus on your path and invest in an area that gives you years of below-average return.
You may even think I wish I would have invested here.
You cannot be a backseat driver and wish things were different. While investing, this happens often. You may find a great investment but there will be plenty that you’ll miss. You can’t chase every single hot investment that’s out there. So don’t beat yourself up if you miss out once in a while.
If you chase a hot investment, the price could easily fall when there is a shift in the market or the economy changes direction. Timing the market is not always easy to predict.
6. Live Within Your Means
If you want seven figures one day, you have to learn to live within your means. You can’t buy everything you want and charge every item while maxing out your credit card.
These are more financial tips rather than investing.
Everyone would love to have a big home, luxury car, or the latest pair of shoes, but sometimes you have to ask yourself, do you really need it? Your income has to justify you spending a lot of money on things that you don’t really need.
If you can afford it and still make your monthly investment, and payments to your bills, then you should be fine. If you’re putting more of your spending on your credit card with no plan to pay it off soon, then you need to rethink about buying that item.
The more money you spend rather than invest can come back to hurt you.
7. Don’t try to Live like the Jones’es
One day you may see your friend pull up in a brand new BMW or Mercedes while you still drive a 2012 Ford. What you have is fine and you have to talk yourself out of trying to upgrade your car, your phone, or something else because the latest item just hit the market. Make upgrades when you really need to. Get the most use out of your money.
Keep your item as long as you can until the item has some serious and expensive repair issues attached to it.
Sometimes you have to sit back and do the work, basically crunching numbers, if money wise it makes more sense to make an upgrade. There will be many occasions in life when you’ll have to do this.
8. Pay Yourself First
It took me some time to understand this but when you invest with a company they usually have an automatic deposit plan. So I set this up at the same time I get paid, which was at the beginning of the month. Now I try to do the same and take a portion of my paycheck and pay myself first. I may invest in something at that minute or put the money away for when I do plan to use the money to invest.
You most likely have bills to pay but don’t forget to pay yourself as well.
Paying yourself first just like you pay a bill will get you closer to your goal. Always take a portion of your income and invest it. Some financial advisers recommend to invest anywhere from 10 to 15 % a month. If you can do more, that’s great but make sure you still cover your monthly bills.
9. Don’t Chase Get Rich Quick Schemes
From time to time, you may see someone talk about making a 20% or more return. This is the time you need to run away and ignore that message. More than likely these are scams and the company just wants to take your money.
No one can really predict how much an investment will return to you over time. Also, the US securities law prevents anyone from making these predictions even if they have an investing license.
I have fallen for some of these get rich quick schemes. Part of me knew they were scams but I put in a little bit of money hoping to make a quick return. As as soon as the investment made some money, the company quickly shut down. It’s better to earn the returns on other investments.
Sometimes you have to ignore these get rich quick schemes. The most these plans will do is take your money and put you further back from reaching your goal.
10. Learn From People Smarter than You
You most likely weren’t taught finances or investing in school. Don’t worry, neither was I. If you were, great! But you can always learn more. So learning from people who are successful or have invested for some time, will help you.
They may not give you the next stock to buy but they can share some powerful lessons they have gone through themself.
Learning from others can be a great benefit.
Sometimes you’ll have to learn from other people you didn’t grow up with. This person could be your financial adviser, someone you met at a networking event, or it could be a well-known person and you read their books. You may even have to pay a little bit of money to attend a seminar and really learn a new way to invest.
These ten tips are not going to make you a millionaire overnight. Overall this will require you to make some changes in your life. You will need to figure out where you are now and where you want to be in a few years down the road.
Will this be easy? Most likely it will not. You may have to make some changes to your current routine. You may have to make some sacrifices. You may even have to go buy some books. You will definitely have to make some changes to your life if you want to reach the seven-figure club.
If you want more tips to be a Millionaire, then check out this article on the 10 Habits to be a Millionaire.
What steps do you need to add to your road to millions?
This article was originally published on medium.
Writer and Investor