A million dollars might not be “what it used to be”, but it’s still way more money than what most people have.
So how do you become a millionaire?
The process of becoming a millionaire is simple.
In fact, anyone is capable of doing it...
But being capable doesn't mean it's easy.
It will take a lot of energy and effort to make it happen, but by following the seven steps I lay out for you in this blog, you could get there sooner than you realize.
Here are the seven steps:
1. Avoid debt
2. Start early
3. Pay yourself first
4. Pay yourself last
5. Always look for new opportunities
6. Learn what is a good investment
7. Do the math and make a plan
8. Befriend millionaires
Let’s talk about each of these in more detail.
Let's say you’re thinking about getting a new phone because it’s been a couple of years.
You know you can’t afford to buy it now, so you throw it on your credit card and make payments.
But guess what?
That credit card charges you interest. Interest is just money you're giving to the credit card company for free.
Houses, credit cards, cars, and anything else that puts you in debt most likely charges you interest to pay it off. That's money you could be saving instead.
Of course, you might need a car to get to work, and you and your family need a place to live. But even though some debt might be necessary for you, most debt isn’t.
You probably don’t need the latest iPhone...
You probably don't need the newest model of that car...
And you certainly don’t need to rack up a ton of credit card debt.
So, unless the debt you're taking on actually has the potential to make you money (ex. rental properties) it's best to avoid it all together.
By avoiding unnecessary debt, you can put more of your money to work for you, instead of sending it to the debt collectors.
There's an old saying that goes:
“The best time to plant a tree was 20 years ago. The second best time is now.”
Starting earlier always pays off in the end.
There are a lot of people in their 20s or 30s who think, “I have plenty of time. I'll worry about planning for the future and setting goals later.”
But guess what ... the earlier you make a plan and start working toward your goals ... the sooner you'll get to where you want to be.
If you want to become a millionaire, you should start working toward that as soon as possible.
Even starting out by earning or saving an extra $50 a week can go a long way over 45 years.
You’ve probably heard this saying, and that’s because it’s solid advice.
If you want to become a millionaire, you have to save money. It’s a lot like losing weight.
You can’t out-exercise a bad diet, and you can’t out-earn bad saving or spending habits.
I know people who make 10 million dollars a year, but spend 15 million a year on pointless shit. No matter how much they make ... they manage to spend even more.
You should make sure the first thing you do is put some money aside, whether that be in savings, or as an investment of some sort. Ideally, you’d do both. If you can only afford $20 a paycheck, that’s better than nothing.
What’s most important is that you make a habit of paying yourself before you start paying anyone else.
I get it. I just said you should pay yourself first, and now I’m saying to pay yourself last.
But hear me out. It’ll all make sense in a minute...
When people say “pay yourself first”, they’re referring to savings. Meaning you should put money away in a savings account or something similar BEFORE you plan your budget and spend money on other things.
And you should definitely put money into savings before you start planning how you’re going to spend your “fun money”.
But it’s that fun money I’m talking about when I say, “Pay yourself last.”
Sure, you may want to go out and party with your buddies, but a double payment on a debt you owe will get you closer to that million dollars.
Going out to eat may sound nice while you're hungry, but so does spending that same 50 bucks over 3 or 4 days worth of meals instead.
Your budget isn’t supposed to be a plan that outlines how to blow every dollar to your name in the most responsible way possible...
It should be a plan that outlines where your money goes, so that you can create your plan and begin to build your wealth.
I'm not saying that you shouldn't ever have fun or do anything at all. What I mean is ... you should always live below your means, so you always have more money than you need.
Not every job with a moderately higher salary is worth abandoning your current job. Similarly, not every investment is worth your time and money...
But sometimes they are.
It’s one thing to be loyal to a company you work for, and it’s another thing to miss a good opportunity because of that loyalty.
Similarly, it’s one thing to throw your money into the latest trending stock, and it’s another thing to invest (for the long haul) into something you understand and believe in ... like starting your own business.
Whether it’s a new job, a possible new business venture, real estate, or anything ... making it a habit to always look for the next investment opportunity is going to get you closer to being a millionaire than sitting there and doing the same thing, day after day, without ever looking for new chances to improve or make money.
It’s possible that your web programmer friend has developed the next great app or website, and giving him some money for a piece of the company can result in a lot of cash down the road. It’s also possible that your buddy is more of an “idea” guy, and never really follows through on any of his ideas.
Any ideas have the possibility of being either good investment ideas, or terrible investment ideas.
What makes them "good" or "bad" can be multiple factors that you have to discover and weigh-out for yourself.
Learning what a good or bad investment looks like will help you get a lot closer to a million dollars ... rather than just jumping on the first opportunity without giving it at least a little bit of thought.
Understand exactly what you're getting into before you get into it.
The cool thing about money is that you can count it.
Meaning, if you want to become a millionaire, you'll want to plan it out.
Start with your goal of a million dollars at a future date, and work backward to figure out what kind of money you’d need to make to hit that deadline.
There are tons of calculators on the internet that can help you figure out estimated investment returns, and general savings too.
Assume you’ll start out making smaller money moves, and that your financial impact will grow over time, as your savings and investments grow.
But, always be sure to include funds for a medical emergency or two in your plans as well. After all, you never know what's going to happen tomorrow.
I wanted to save the best piece of advice for last...
Surrounding yourself with people who push you to be better, and have achieved what you want to achieve, is crucial to your success.
If you're surrounded by people that have no dreams, aspirations, or drive to better their life ... your chances of making it out of that circle, and ACTUALLY accomplishing your goals will shrink significantly.
Choose your friends and influences carefully.
If you want to be a millionaire, it would be a good idea to know and befriend at least one millionaire.
That way, you can learn from and imitate the habits that have helped them reach that mark.
A million dollars is a lot of money.
It’s more than most people will ever have.
But it’s not impossible to get that money if you work hard, and learn how to manage the money you do have.
If you want to start working on becoming a millionaire, follow these steps and listen to the Real AF Podcast to learn what it takes to be successful.