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4 Reasons Why You’ll Never Be a Millionaire, and How You Can Change That

There are roadblocks stopping you from achieving this elite status, but changing your strategy can help you navigate them.

Brandon Turner

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Relaxing vacations on the French Riviera, huge donations to your favourite charity and an early retirement. These are the kinds of things people think of when they hear the word “millionaire.”

It’s unlikely you’ll ever experience that. Sorry.

Unless, of course, you can overcome the following four roadblocks stopping you from achieving millionaire status. Each roadblock below also offers an “immediate action step” to help you overcome the things holding you back. Let’s get started.

1. You don’t understand how money works

Money is not a complicated topic, but still, few seem to really understand how it works. Do you? Sure, you can blame the school system or your parents, but the responsibility is still on you to figure out how money is made, how it is held, how it is invested and how it is preserved.

Related: How To Become A Dot.Com Millionaire

Millionaires understand that money is not something that is discovered, won, or created by chance.

As I stated in my previous column, 5 Powerful Books That Changed the Direction of My Life, wealth is not an accident, but an action. Building wealth is the world’s largest game, and if you want to win, you need to learn the rules. So start studying.

Immediate action step: Start by reading several great money books, such as:

But don’t just read, internalise the knowledge. Debate it. Talk about it with your spouse, grandma and mail carrier. Personal finance can be learned, and by mastering it, you might discover that wealth is much easier to build than you previously thought.

2. You don’t value your education

I get it: you are busy.

You have 25 hours of work to do every day and there simply isn’t enough time to get it all done. That’s the life of an entrepreneur, so something needs to be sacrificed. Chances are, you are sacrificing your continuing eduction, and it’s severely hurting your chances of becoming a millionaire. Wealthy people never stop learning, despite the business in their life.

In a recent interview on The Tim Ferriss Show, Noah Kagan says he takes time every morning to read, as well as setting aside time every Tuesday morning to simply learn.

When is the last time you scheduled “learning time”? Do you just try to “fit it in” when everything else is caught up?

Follow the advice of Kagan, Ferriss and other incredibly successful entrepreneurs: never stop learning, no matter how busy you are.

Immediate action step: Listen to the interview with Noah Kagan on The Tim Ferriss Show. Trust me – it’ll get you far closer to millionaire status than those TPS reports you were planning on working on today.

Related: How to Become a Millionaire by Age 30

3. You live to your means

What are you doing with your extra money each month?

I know, you probably don’t have any left over. Your boss doesn’t pay you enough. Your company hasn’t taken off yet. Or whatever other excuse you have. But let’s face it: You are spending too much money. I don’t care how much you make – it doesn’t matter. Everyone lives to their means. You could make R20 000 per month or R200 000 per month and you’ll still be broke.

The millionaires I know have made a conscience decision to live on less than they make. Instead of upgrading their life every time they make more money, they choose to put that extra cash to work for them through various investments, such as their business, stocks, real estate or other assets, which I’ll talk about next.

Immediate action step: Pull out your bank account statements for the past three months. Figure out where every single rand went, organising the entire list into categories. Then, create a solid budget for your future. If budgeting is difficult for you, I’d recommend YouNeedABudget. Also, read The Simple Action No One Does That Will Make You A Millionaire. That blog post alone might just make you a millionaire, someday.

4. You don’t collect assets

A job will never make you rich. Neither will saving all your cash in a coffee can. So how can you build that wealth?

Start collecting assets.

An asset, as defined by Investopedia.com, is “a resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit.”

Millionaires collect assets. It’s as simple as that. Do you?

An asset could be a profitable business, a growing stock portfolio or investing in the right piece of real estate (not all real estate is a good investment. It’s what you do with it that matters.)

Your car is not an asset. That shiny new electronic gadget on your arm is not an asset. Your home might not even be an asset. These are all liabilities that are robbing you of future wealth.

Related: From Dirt Poor to Self-Made Millionaire: Lebo Gunguluza

Stop collecting these, and start collecting things that will make you money in the long term.

Immediate action step: Make a detailed list of all the assets in your life, as well as their current value. Are you comfortable with this list? Then, make a detailed plan to acquire more assets and make a pact with yourself to NOT buy so many liabilities.

Becoming a millionaire is not impossible. In fact, it’s relatively easy when you have time on your side and the knowledge to do so.

However, it does require overcoming hurdles, which can be tough. If you want to achieve a million dollars in net worth, or more, continue to learn about the game of money, value your education, live below your means and start collecting assets. You’ll get there soon enough!

 

This article was originally posted here on Entrepreneur.com.

Brandon Turner is a real estate entrepreneur and the VP of Growth at BiggerPockets.com, one of the web’s largest real estate investing community. He is also the author of The Book on Investing in Real Estate with No (and Low) Money Down and several other books. Buying his first home at the age of 21, Turner quickly grew his real estate portfolio to over 40 units using a variety of creative finance methods. He and his wife Heather live in Grays Harbor, Wash.

Personal Finance

(Infographic) The Financial Advice Millennials And Gen Zers Want To Know

Having a grasp on your financials is tricky, but it’s crucial if you want to be successful. And that starts with getting the right advice.

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Whether it’s saving for retirement or paying off credit card debt, money management can be a challenge. Of course, different people have different concerns – and that often comes with age. While a 60-something baby boomer might be organising their savings for retirement, your 20-something millennial might be focused on paying off student loans.

In a recent study, financial intelligence company Comet surveyed more than 1 000 people to uncover the top financial concerns of various age groups, as well as the financial advice millennials and Gen Zers want to know and what they hear instead.

Overall, saving for retirement was the top concern across all age groups, with saving for an emergency and affording monthly bills following in second and third. However, it’s no wonder these are some of the most pressing worries – according to the research, 23 percent of people admit they don’t have a savings account, and 43 percent reported not being on track towards their retirement goals. Perhaps that’s because they didn’t hear the right advice growing up. At least that might be the case for Gen Zers and millennials.

According to the research, these young people want to learn things such as how the stock market works, how to manage an investment portfolio, how to invest in real estate and how to build credit. Instead, they’re simply told how to create a budget, save for retirement and pay credit card bills in full every month.

Related: 7 Critical Things Your Financial Advisor Must Meet

Having a grasp on your financials is tricky, but it’s crucial if you want to be successful and comfortable. To learn more, check out Comet’s infographic below.

1532099434_2-cents-worth-infographic

Related: Financial Wellness Coach Nelisiwe Masango Shares Retirement Wealth Advice

This article was originally posted here on Entrepreneur.com.

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Personal Finance

14 Ways To Make Quick Cash On The Side

If you need money quickly, here are some solid ideas.

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Need to make some fast money on the side, whether it’s to pay off a credit card or to make your rent?

Keep in mind, making quick side cash isn’t about making a lot of money or getting rich. It’s about getting a shot of capital to help tide you over and put something extra in your pocket. However, some of these side-income ideas can build up your wealth over time. There’s many ways to accomplish this: By participating in the gig economy, the sharing economy, online sales networks, passive income techniques and more.

If you’re looking to make extra money in a relatively short period of time, check out these 14 slides.

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Personal Finance

Take Advantage Of Financial Democracy Made Possible By The New Stock Exchanges

Why should financial democracy matter to entrepreneurs?

Etienne Nel

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Because it creates a society able to afford products and services. Without it, even the innovative products and services that are entrepreneurs’ bread and butter will fail.

What is financial democracy, exactly?

It’s both the right and the ability of the (wo)man in the street and business people to make the decisions that affect their financial circumstances.

Financial democracy does not automatically follow political democracy. For almost 25 years after South Africa’s political transformation, the exclusiveness of our financial markets continued to deprive the vast majority of South Africans of the means to invest, save, and build wealth. South Africa has, therefore, never developed a retail stock exchange environment. So, it has deprived the majority of small and medium sized business of access to capital.

For entrepreneurs to truly flourish, they need a mechanism that easily and seamlessly connects the investor pool with every size of business. And, they need affordable ways to enter both the retail and institutional market.

In short, they need stock exchanges. Ones on which listing takes weeks rather than years, doesn’t break the bank for listing fees, and provides the shortest route to the largest possible potential investor base.

That’s not been possible in the stock exchange monopoly that existed for six decades. Now, it is.

What’s changed?

We now have four new stock exchanges. The resulting competitive environment will significantly reduce the cost of listing – and the cost for investors of buying and selling shares.

Instead of restricting share trading to people or organisations who already have tens of thousands of rands to invest or millions to spend on listing, by licensing four new stock exchanges, the Financial Services Conduct Authority (FSCA, formerly the FSB) has recognised that most financial decisions do not call for high levels of education.

Related: The Role Of Foreign Exchange In The Economy

Most people know how to spend their own grocery money. Most know that it’s better to keep their R1 000 monthly income in a coffee jar than spend R50 of it on bank account fees. People who can barely read and write are immensely skillful at manipulating air time deals to their advantage.

There is significant financial savvy in all social strata.

In the same way, although the mechanics of bookkeeping and accounting may be unfamiliar territory to many entrepreneurs, most have a clear understanding of the difference between profit and loss.

The FSCA has therefore enabled democratisation of the financial markets by enabling the broadest possible spectrum of entrepreneurs and investors to use stock exchanges to participate in and contribute to the economy – on their own rather than prescriptive terms.

How do you take strategic advantage of this democratisation?

  1. Base your business strategy on people’s instinct for making decisions in their own best interests. Trust financial decentralisation, such as one sees in crowd funding and in digital environments such as block chain, where people would far rather trust one another than institutions and governments. This is democracy innately at work in the financial environment and it’s accelerating organically as digital technologies give people more means and the confidence to help themselves – to information and opportunities. Ride the wave.
  2. Tap into people’s desire to innovate. Consumer organisations have proved that letting people interactively help them develop products is a powerful growth engine. Apply the principle by letting people grow your business by buying shares in it, giving you capital and themselves a platform on which to build wealth.
  3. Remember, the ultimate loyalty reward is equity.

Your financial democracy business plan

Look to list on an entrepreneurial stock exchange; one that was founded by entrepreneurs on entrepreneurial principles.

That means: A stock exchange that is already built on financial democracy and decentralisation. One that has, at its core, a single operational concept that keeps things simple for you, automatically gives you an immediate competitive advantage, and, ensures that no matter what your business needs in terms of attracting capital, the exchange can provide all the options in the same, consistent way.

What does such an exchange look like?

It has fintech capabilities. So:

It slashes your listing costs. It achieves this, among other things, by enabling you to populate an electronic prospectus, demonstrating your financial viability, and self publish.

It gives you control by having the granularity and agility to impose relevant governance right down to the individual investor. You get to decide the types and quantities of investors you want to attract. This also enables you to achieve black economic empowerment in perpetuity.

It leads the world by clearing and settling trades in T+0. No-one in the value chain has to hold large sums of money for days following a transaction. Small transactions become profitable. Investors don’t have to risk their life savings on a single large trade. A retail market is opened. An investment and savings culture is entrenched. The economy expands. Your business grows steadily.

It enables anywhere, any time trading via a mobile app that allows investors to see share value in real time. See economy expansion point above.

It integrates processes and procedures, simplifying them and ensuring rapid onboarding of issuers and, therefore, speed to market with new concepts and alignment with the digital economy.

It operates a principles-based regime. So:

It treats you, as an executive, with respect. It’s not prescriptive. It does not insist on excessive oversight, allowing the Companies Act to guide you to sustainability.

It does not attempt to squeeze your company into a pre-defined business or listings format. It recognises and works with your uniqueness.

It obviates the need for expensive specialist listings advisors.

It focuses on financial inclusion and access. So:

Shares can be bought and sold for no more than R1 000. See economy building point above.

Related: 27 Of The Richest People In South Africa

The new world of stock exchanges is integrated, synergistic, holistic, organic, self-fulfilling

Decentralisation of financial control, democratisation of opportunity leads to a whole new economy. One in which, for instance, a taxi operator can finance a minibus through a company in which his purchase gives him shares. A single purchase gives him two benefits: a vehicle on which to found his business and a longer-term investment in shares that he can trade. The funding company gains liquidity through access to a wider base of investors while being able to control who buys and sells and the conditions on which trading takes place. Increasing black equity in business becomes an organic, natural, self-perpetuating process.

Everyone wins in a decentralised, democratised financial market. And it’s the stock exchanges that drive the process.

As an entrepreneur, can you afford to ignore the acceleration that listing could give your business growth?

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