OK, so it’s not easy.
Unless you’re lucky enough to be born into riches, inherit wealth or strike it rich in the lottery, you’ll need to take that active step towards prosperity and wealth. While Henry Sy’s megawealth may be difficult to achieve, becoming a millionaire is within reach of those who start young and develop the right habits. Basically, anyone, at any age, can develop the traits that increase wealth and decrease debt.
Anyways, I’ve come up with 5 steps to becoming a “millionaire” or wealthy or financially independent.
Step 1: Earn Income.
Clearly, the more money you make, the faster you can reach that milestone, but that doesn’t mean that you must have a high income to obtain millionaire status.
Step 2: Save, Save, Save.
Get in the habit of saving money. The simple fact is you will never grow wealthy if you spend everything you can. Regardless of how much you earn, you have to put some aside in savings. Build an emergency fund in a money market account so you don’t have to go into your savings and investments when there’s an unexpected major expense. Having a cash cushion definitely helps avoid debt. Having cash savings also allows you to use the money for investments or other large purchases (house or car). Remember, money saved is worth than money earned.
Step 3: Live Below Your Means
I am not implying you should deprive yourself from the things you enjoy. Rather, I believe that you should focus on buying value on the things you enjoy as well as reducing your expenses on things you don’t need.
Step 4: Make Money Work For You
Investing is the best way to grow your wealth. Compound interest has been called the strongest force in the universe, and you want that force working for you! As they say, it takes money to make money, but that doesn’t mean you need a lot to invest. Open a mutual fund account with an insurance company that has low funding fees. Build a diverse portfolio and you can reasonably expect to earn 8% to 10% annually on your investments over the long run.
Step 5: Continue Doing Steps 1, 2, 3, 4, 5… Earn More, Save, Live Simply, Invest, Earn More, Save, Live Simply, Invest, Earn More…
Once you’ve done the previous items, the only thing left to do is to continue doing it. As far as your income in concerned, be open to opportunities or ways to increase your income, whether going for a promotion, finding a job elsewhere or starting a side business. Increased income means increased savings, provided you live below your means. As that additional money finds its way into savings and investments, the more it will continue to grow.
To Be A Millionaire Isn’t Hard to Do IF You Work at It
There are no secrets to becoming a millionaire and almost anyone has the chance to make it happen. Although there are many factors in play that can make this easier or more difficult for different people, I feel that doing these 5 Simple Steps can help you reach your millionaire goal whether it is in 5 or 40 years.
photo credit: Loving my little duck! via photopin (license)