Millionaire. It’s a title that plenty of us would love to have. But, is that actually feasible?
Believe it or not, becoming a millionaire is a goal that can be achieved this year. In my life, I have been a millionaire several times. Most of the time before my 30s I gambled it away on cars, homes and an extravagant lifestyle.
Despite blowing millions, I have developed a process that guarantees that eventually you will become a millionaire if you follow these eight pieces of advice:
1Develop a written financial plan
One of the main reasons people don’t become millionaires is because they don’t write a financial plan. Developing one forces you to take action, instead of just talk. It guides you in making the right decisions to achieve your dreams and goals.
Financial planner Scott Hedgcock says that when planning for a more secure future, two inputs are indispensable: How much money you have and how much you spend.
“The basic point I want to stress about these two inputs is that they are absolutely fundamental to all financial planning, regardless of how large either of them is,” he says.
“In my experience, the biggest difference between those on the right path versus. those on the wrong path was the amount of time and effort they put into devising a plan for their finances.” Taking the time to create a plan and see it through, “is the one thing all financially successful people have in common.”
Hedgcock also says that “the success experienced by those who do this occurs regardless of their relative wealth.”
When creating a financial plan, consider the following:
- Focus on what matters most, don’t obsess over the past.
- Focus on what you control by listing known expenses before discretionary expenses in your budget.
- Focus on your future by anticipating how much your future self will need to survive.
2Focus on increasing your income
“In today’s economic environment you cannot save your way to millionaire status,” writes Grant Cardone, who went from being broke and in debt at 21 to becoming a self-made millionaire by 30.
“The first step is to focus on increasing your income in increments and repeating that. My income was $3 000 a month and nine years later it was $20 000 a month. Start following the money, and it will force you to control revenue and see opportunities.”
Thankfully, you have several options to boost your revenue, like investing in high ROI businesses and side hustling.
3Increase your streams of income
After studying millionaires for five years, author Thomas Corley discovered that 65% of self-made millionaires had three streams, 45% had four streams, and 29% had five or more streams. This could include starting a side-business, working part-time, investments, and renting everything from your home to your car to household items.
4Automate your savings
To become a millionaire you need to get into the habit of saving by contributing to your RA and other investments, and an emergency money market fund. Automate this process to ensure that you save a certain percentage of your salary. It’s suggested that you should put 10% towards investments and 5% towards savings.
5Upgrade your skills and knowledge
“Read at least 30 minutes a day, listen to relevant podcasts while driving and seek out mentors vigorously,” writes Tucker Hughes, who became a millionaire at 22.
“You don’t just need to be a master in your field, you need to be a well-rounded genius capable of talking about any subject whether it is financial, political or sports-related. Consume knowledge like air and put your pursuit of learning above all else.”
6Live below your means and stay off the credit
It’s widely known that the wealthiest people in the world are frugal. They don’t spend excessively on designer and luxury items. They use coupons. And, they’re known to live below their means by purchasing modest homes and vehicles.
They’re also known to keep their debt under control by using credit sparingly. Take a cue from business magnate T. Boone Pickens, who only carries around as much cash as he needs for what he intends to buy.
7Associate with millionaires
“In most cases, your net worth mirrors the level of your closest friends,” writes Steve Siebold in Business Insider. This isn’t new. It’s been around since Andrew Carnegie and the Master Mind principle.
“Exposure to people who are more successful than you are has the potential to expand your thinking and catapult your income,” says Siebold.
“We become like the people we associate with, and that’s why winners are attracted to winners. The reality is, millionaires think differently from the middle class about money, and there’s much to be gained by being in their presence.”
This article was originally posted here on Entrepreneur.com.