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10 Steps to Become a Millionaire
Everyone wants to be a millionaire; it’s part of your dreams. Every culture celebrates the status of becoming a millionaire, and for good reason, it takes a lot of focus and sustained effort to get there. The reality is that with hard work and determination, you too can become one.
According to various statistics, more than 85% of millionaires are self-made. While success is never guaranteed, there are certain proven steps to follow.
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Here are 10 steps that will help you get there in the long run.
1. Create A Goal
The goal is to become a millionaire. But not all millionaires get there by the same path or by the same stage in life. It is up to you to intelligently design your path. This requires you to be SMARTER than most about your goal setting.
Select a specific time by which you want to reach your goal, make your financial goal measurable, give yourself actionable steps to follow, take some risks, make your goal time-dependent with short check-in intervals, make it exciting, and finally make it relevant to your overarching life goals. Design your life for success.
2. Develop A Plan
To get from here to there, you need a path to follow. Reverse engineer your plan for success. Decide how much you are going to save on a monthly, quarterly, and annual basis. This all depends on how quickly you want to reach your goal of becoming a millionaire.
Money Tip: A great way to track your goals consistently is by journaling regularly. This allows for regular “check-ins” with yourself; it will keep you honest.
3. Get Rid of Debt
Debt of all kinds – credit card, student loans, consumer – will shackle your financial progress. Remember: Debt is Not A Necessary Evil. Avoid it at all costs.
Get rid of the debt in your life, forever. This will allow you to put even more money towards savings and investing in your future. Becoming debt-free will set you up with the financial base to support your goals.
4. Begin Saving
Once your debts are fully paid off, it’s time to start saving. Start saving an emergency fund. You can do this by creating a savings account for this purpose
which is equal to the cost of 3-6 months of your living. This creates the mental bandwidth to focus on achieving your goals. As an added benefit, you start to get stronger mentally, you feel more safe. Success breeds success.
5. Invest your money
Now that you’re used to saving part of your income, it’s time to build up your investments. Investing can be intimidating. But remember that because you invest, it means you win. And your goal is to keep winning.
Investing is the best way to grow your wealth over time and it aligns you with the long-term growth it takes to achieve millionaire status.
The Intelligent Small Investor: Ordinary People Become Millionaires Paperback – January 20, 2021
If you want to laugh and learn more about how Wall Street works, read Monkey Business.
6. Diversify Your Portfolio
You have heard it a thousand times – diversify, diversity, diversity. Not all asset classes are created equal. When you are thinking about risk, spread it across different asset types, geographic regions, industries, sectors, and economies.
It’s one of the three things hedge fund manager Ray Dalio recommends to Millennials. Ray Dalio is one of the most successful investors of all time and the author of Principles. Take his advice.
7. Ask A Professional
The best athletes in the world have coaches. It’s no different for world-class investors or business leaders. In fact, Gary Keller – founder of Keller Williams Realty – credits his coach for leading him to the idea for The ONE Thing.
If the best in the world have coaches, why not you? You should get professional advice about your financial plans; good advisors will hold you accountable. Financial professionals are there to help you in the process and accelerate your collision with success.
8. Monitor Your Spending
Get a grip on your variable and fixed costs. Your spending is one of the most controllable features of your monthly and annual cash flow. Cut the nonessential expenses and make sure that your spending aligns with your saving goals.
Money Tip: As you become more successful in your career, fight lifestyle creep and honor your commitment to socioeconomic downsizing; it’s the easiest and fastest way to get rich quickly.
9. Be Smart With Taxes
No one likes paying taxes. The federal government knows this and so do you. There is a reason Uncle Sam takes your income taxes out of your paycheck before you get it. Avoiding costly tax mistakes can save you thousands of dollars in the long run.
Take advantage of tax-saving strategies, like tax-loss harvesting and avoiding capital gains, to bolster your after-tax returns. This type of preemptive thinking will help you avoid tax leaks in your portfolio and allow you to keep more of your hard-earned money.
10. Practice Patience
There are plenty of get-rich-quick schemes; this is not one of them. You can become a millionaire. How quickly that happens is completely up to you. It will take practice and patience for you to cross the finish line. Follow the advice of those that have gone before you, and adopt the habits of millionaires today. You can do this!
Building up a million-dollar portfolio is not easy. If it was, everyone would do it. Join the ranks of America’s millionaires, and decide on Turning Professional with your money. Begin your trip to financial freedom today.
Personal Capital is an awesome tool for tracking your progress to Millionaire status. This is the tool that I use to track my finances. As a side note, I highly recommend checking out the retirement savings projection tool and investment tracker.