Last Updated on
DollarBreak goal is to empower readers to make better financial decisions. This post may contain affiliate links from our partners who share the same vision. Disclosure.
These days, the word “millionaire” gets thrown around a lot. We all would love to be millionaires.
But it’s not really the money that people want, they want the freedom that being a millionaire can buy you.
Freedom from your job, freedom to travel, freedom to spend time with your loved ones, these are the common reasons for becoming a millionaire.
In this day, anybody can become a millionaire. It’s an equation, a straightforward, simple plan that anybody can follow. No matter your age, your background, your job history or your current income, you, too, can become a millionaire and enjoy that freedom you always wanted.
12 Ways to Become a Millionaire:
The path you walk and the path millionaires walk is only separated by habits. It’s not too far from what you are already doing. Daily habits like taking risks, making savings plans, working on investing strategies, and self-development are just a part of daily life for millionaires.
Leo Babauta, best-selling author, and creator of the ZenHabits blog couldn’t start a running habit. So, he made it a habit to just tie his running shoes in the morning. That’s all he had to do. As it got easier for him just to do a simple task he slowly increased the difficulty. Run to the mailbox. Run around the block. Run to the end of the street. And over time, the habit was ingrained in him, causing him to lose weight and get fit.
Do you have a hard time creating a new habit? Make it impossibly easy and slowly increase the difficulty. Save $5 from every paycheck. Read one chapter a week on investing. Cut one unnecessary coffee a month. You’ll notice the habit of developing and the incremental change will powerfully impact your financial status. Use an app like Y-Productive to help you develop sustainable healthy habits and you will start
Everybody has an opinion, even on something they don’t know. Ask a random person on the street the first step to performing open heart surgery, and they’ll give you an answer. So, who do you listen to for advice on what to do? Listen to those who have done it before.
When Warren Buffett wanted to learn how to invest, he sought out a professor in his school, Benjamin Graham. Graham taught Buffett what he would need to do and know in order to make money investing. Buffett religiously applied those lessons every day, following the advice of Graham simply because he had already made a fortune in the market.
Don’t know who to ask? It’s simple. For example, when asking about an investment property, talk to realtors who have properties of their own. Ask your financial advisor to show his own portfolio. Talk to business owners with a history in your industry. Without that proof of doing themselves, their opinion should not be as valuable to you. Or you can sign up for a service like Find A Mentor that connects you with leaders in your industry.
3. Change Your Mindset About Money
We all, often without realizing it, have a bias about money. Maybe we grew up with parents who had money problems. Maybe we had terrible friends who taught us that greed is the center of all business. Millionaires have a different perception of money, and you need to change your mindset about money in order to make it.
In his book, Thou Shall Prosper, Rabbi Daniel Lapin talks about changing the mindset you have about money. In Jewish culture, money is a symbol of service. Every time you serve a customer, they award you with a “certificate of appreciation”, also known as money. The more you can help someone, the more appreciation you’ll receive.
If you have an unconscious bias that making money is bad, you’ll have internal strings holding you back from becoming a millionaire. But serving someone isn’t bad, is it? The simple act of changing how you view money cuts those ties that hold you back making serious money.
In order to become a millionaire, you have to know where are you right now. How can you know where you’re going unless you have an accurate idea of your current financial status?
Although many different successful people talk about setting goals, Dave Ramsey makes a very strong case for building what he calls SMART goals. That’s an acronym to help you assess where you are along the way to becoming a millionaire. What does SMART stand for?
- Specific – Clearly state what you want to accomplish
- Measurable – Make sure to track your progress
- Achievable – Set realistic target and actions plan
- Relevant – Clarify the reason and motivation
- Timed – Set a time limit for reaching your goal
How does that help you know where you stand? As Dave Ramsey points out, the difference is in the goal itself.
Compare these two statements:
- “I would like to be rich one day”
- “I would like to have a million dollars in my net worth by 2025”
By setting that SMART goal, Ramsey teaches that it’s an accurate reading of what it takes to get there. You also know how you measure up with your current progress and status.
There is no half-hearted way to build wealth. You have to be committed to doing it with your whole being. That’s your time, your energy, and your money all geared to building wealth.
Tony Robbins was not born successful, but it wasn’t until he changed his commitment level that he started to see results. He was a self-confessed broke janitor making just $40 a week with no prospects or plans in life. But then he committed to attend a motivational seminar held by Jim Rohn, and that changed his life. It took that early commitment followed up by a life that was completely sold out to find ways to change people’s lives to see the success that he has now.
How are you spending your time, energy, and money? Are watching the same TV shows, wasting time on Netflix, throwing your salary at useless junk that gets you nowhere? The only way to become a millionaire is to get 100% committed to building wealth and success in your life.
There is a saying that you are the average of the 5 people that you surround yourself with the most. The people you spend time with are going to consciously (and often unconsciously) affect your levels of success. To change your habits, start to spend time with millionaires who can elevate you.
Napoleon Hill practiced this every night with his “mastermind group”, an imaginary seminar he held with top minds including Henry Ford and John D. Rockefeller. Although he didn’t have access to these successful people, he often imagined spending time with them, talking about his problems, learning to see his issues through the eyes of these heroes of his.
If you can’t find actual millionaires to spend time with, there are so many options for you to choose from. You can attend seminars, listen to podcasts, watch documentaries, or sign up for an Audible.com account to gain access to some of the best minds out there in your field.
We all love hearing the reports that many millionaires and billionaires dropped out of high school and college to found ultra-successful businesses. Bill Gates, Richard Branson, and Mark Zuckerberg are often cited as people who found school was holding them back. But that doesn’t mean that they stopped learning.
Millionaires are always upgrading their knowledge and skills. In the world of business, if you aren’t learning something new and improving, you’re going backward. How are you going to increase your knowledge and skills today? It could be that you sign up for a course? It could be that you take an online class. Or it could be that you dedicate 30 minutes every day to read a paper or article from your industry.
There is a reason that we say that readers are leaders. Alternatively, you can use sites like Skillshare, Udemy, or Coursera to teach yourself a new skill. No matter who you talk to, all millionaires are never done learning something new.
There are so many financial books and advisors that start out their practice by saying that you should look for ways to reduce your spending. But let’s be honest. You can’t save your way to a million dollars. You have to find ways to increase your income.
Ramit Sethi teaches this concept to those starting out in business. He talks about producing better value in your own work so that you can justify a price increase in your income. But you can’t just ask for more money from your clients or your job. You need to have the work to back you up. An increased income starts with proving yourself as valuable to your boss or your customers. Then they will be happy to pay you more than what you earn now.
Are you in a position to increase your income? Start by putting out better results with your job, and then leveraging your increased output to higher wages or better paying jobs. You simply have to find ways to increase the income you have to achieve the success you want. Enroll at Teachable to access lectures on how to increase your current income.
When Tom Corley went out to write the book on the habits of millionaires, he studied how they made their money. His findings in Rich Habits should tell you something interesting.
Two-thirds of self-made millionaires have at least three streams of income. That’s at least three different sources of money coming in. Almost half of all self-made millionaires have at least four sources of income. Having multiple income streams is more than just bringing in more money. It’s the passive money that comes in even if you’re sleeping, traveling, or working on other projects.
The typical wealthy individual has a career, some rental properties, a side-income from their own investments, and they still start a business of their own to make even more money. In fact, according to research performed by Thomas Stanley in his book The Millionaire Next Door, most millionaires agree that income does NOT equal wealth. And wealth does NOT equal income. How much you make is not a determining factor of becoming a millionaire. It’s how many sources you have that make the difference.
You cannot outearn a bad spending habit. Even millionaires understand this and work hard to save massive portions of their income.
Again, going back to the findings from his book, Thomas Stanley teaches us that most millionaires live on just 7% of their wealth. They live well below their means and will not overspend, even if they have the ability to not earn any income for 10-15 years.
Saving money is more than an
“When I’m saving, every temptation I get to spend money is going to take me further away from my savings goals. I look at any frivolous spending as double the amount. Because I need to make up the money from what I could have saved and then recoup the loss on the money I spent. It’s not worth it when I see every price is double what the sticker says”
Becoming wealthy starts with saving 10-15% of your income and increasing that as your income increases. Your living means remains the same while your savings rate goes up. If you make over $250,000 a year, you should set aside at least two-thirds of that income towards savings and investments. Sign up for a savings app like Digit to make saving a habit.
Risk varies for everybody, but there is no making money without risk. What millionaires understand that the rest of us do not is that they are willing to accept more risk with their investments and moves than the general population.
Learn to get comfortable with risk. If you’re not there yet, increase your knowledge in an area so that your risk level decreases. For example, if you consider investing in the stock market
Kevin O’Leary says it best:
“I think of my money as soldiers that are on a mission. Every day, I wake up and I plan how to put my money in harm’s way. I want my money to face the harm, capture enemy soldiers and bring them back to me. In my mind, true satisfaction is when I go to bed richer than when I woke up.”
There is only so much that you have the willpower (or brainpower) to do. That is why millionaires like to automate their finances. They set their bank to withdraw amounts from their paychecks, their dividends, their income, and it redirects to where they want it to go.
According to Ramit Sethi, the author of the New York Times bestseller I Will Teach You To Be Rich, he talks about automation as the single tool that most people don’t do that will create success. He teaches practical ways to set up banking accounts and redirecting automated payments for maximum efficiency.
“Bills, payments, and even investments will be automated, leaving you to focus on the things that really matter”, says Sethi. Millionaires love to have a laser focus on the tasks that generate wealth, so they leave the rest to automation.
Set your bank account that a percentage is taken out every month for savings, investing, and for paying bills without you needing to think about it. You can then concentrate on the crucial, money-making tasks that will make you rich.
Millionaires know something that most people do not. They take certain habits, adopt certain attitudes, and implement them, while the rest of the world scratches their head at how they do it. The truth is that this is available to anybody, as long as you’re willing to take immediate and drastic action.
Are you able to become a millionaire at any age? Of course, you are. Copy the behavior and attitudes of the ultra-wealthy and you too can see dramatic wealth flow towards you.