What do you have to do to be a millionaire? Well, you could always start by being a billionaire! Yeah, we know... bad joke. But no, on a more serious note.., there are two ways you can move financially: up and down.
If you earn less than you spend, you're moving in the wrong direction. If the reverse is true, you're moving in the right direction. If you continue to move in the right direction, you can achieve financial freedom and if you focus on your goals and continue to build wealth, you can eventually become a millionaire.
Besides the basic starting assets - time, energy and money - here are 12 how-to steps to become a millionaire:
Step 1:
Define what it really means to you to be a millionaire. Does it mean you own a million dollars worth of real estate outright? Does it mean having a million dollars in available cash? Does it mean you own a million dollar portable empire online? Or something else? Decide this for yourself first, before anything else. This way you'll know what you're working towards.
Step 2:
Take a look at where you are are now. What skills and assets do you already have that you can make use of? What do you have to do or learn to start being a wealth builder? Regardless of your circumstances, you will be taking a common path to reach your goal, along with other wealth builders, you just need to find out what you need to do to get on that path?
Step 3:
Bring in the cash! Find a way to make money. First you need to take care of your basic needs, and the basic needs of your family if you have one. A job is one obvious way to make money, although you could also be self employed in some capacity. As long as you have enough consistent income to get your needs met plus a little, you're on your way.
Step 4:
Bring in some more money! Shoot for a promotion at work, or find a better paying job, or start earning extra money on the side. There are many opportunities for making money out there. Keep your mind on how you can enhance your earning potential and bring in a little bit more. This is how to make just a bit of cash in the short run, and also how to make millions in the long run.
Step 5:
Spend money, yes, but just a little! Live below your means. One of the hardest parts of building wealth is putting off having luxuries today so you can have financial security AND luxuries in the future. Money invested early in life will multiply later on. Down the road, when people you are friends with today are wishing they could afford to retire, you'll BE retired - and set for the rest of your life.
Step 6:
Start with solid investments, then move gradually to higher risk ones. No investment is risk-free, but many standard investments, like CDs (certificates of deposit), are low risk with a reasonable return. Once you have more money to risk, use some of the excess to play for higher stakes.
Step 7:
Keep increasing your income and your investments. This is what we really call a million dollar idea! It may sound hard, but all it really means is that you'll keep building your skills, and keep getting the benefit. If you are employed, seek a raise every year. If you can't get that, look around for a better opportunity.Then the more money you bring in, the more you put out into investments so that you build real wealth for the future.
Step 8:
Make friends with the concept of compound interest. If you invest four thousand dollars at the end of the year, you have... four thousand dollars at the end of the year. If you invest $333.33 each month of the year, though, at the end of the year you'll have 4149.93. You've created money. Now take that whole equation times ten. Times one hundred. Times one thousand. These are the kinds of numbers a millionaire juggles.
Step 9:
Pay down your credit card debt. That doesn't mean get rid of your credit cards. Go ahead and use them for as many standing expenses as you can - but pay them off every single month. That will build your credit rating, enabling you to get better deals in the future. Remember, though, that credit card companies understand compound interest very well, and they get a better deal on their investments than you do. Your debt is their investment. Don't give it to them.
Step 10:
Put yourself out there! If you really want to be a millionaire, you probably want to do it sooner rather than later. Push towards your goals. Find ways to make more money. Find ways to save more money. Find ways to invest money more intelligently. Each little bit, every little step helps you along the path to wealth.
Step 11:
Use these steps together. In the first year let's say you earn a $40,000 salary and invested 10% of that on a monthly basis. End result: $4,149.93. In the second year you increase your salary to $44,000. You invest 10% on a monthly basis, coupled with earnings on the $4,149.93 already saved. Result: $ 9,059.30. Not too impressive yet. But after just 10 years of saving in the same manner, you would have invested $63,749 and a bit, and would have a cash balance of $91,320. Not bad, but still not a million! After 20 years of consistent saving and investment, you would have input $229,097 and would have $439,562. Almost halfway there! After 26.25 years on the same course, Input: $ 448,640. Available: just a little over a million dollars. There you go. If you started when you were twenty, you'll be a millionaire at forty-six with the option to retire.
Step 12:
Keep on doing what you're doing. As you continue to build wealth and get closer to your goals, you will feel pleased with your progress and eventually you'll have a million dollars. Depending on how you want to spend the rest of your life, though, you might want to have more. Every small step that you take now will affect where you are twenty, thirty, forty years down the road. You can absolutely be a millionaire. You might decide to shoot for billionaire. That will be your choice. Be consistent, take advantage of compound interest as much as possible, and just enjoy the journey getting there.