Table of Contents
- 1 The 3 Best Ways to Become a Millionaire
- 1.1 How To Become a Millionaire – How Others Have Done It.
- 1.2 How to Become a Millionaire – Final Thoughts
The 3 Best Ways to Become a Millionaire
In this article we’re talking about how to become a millionaire and three, actually four, real ways to get there. When you look around and see those who are millionaires right now, it might seem almost impossible for the average person to become one.
They are elite sports stars, Hollywood celebrities, they own one of the greatest tech icons in Silicon Valley or they are some investment genius. But the truth is that there a lot more millionaires in the United States, and certainly around the world, who don’t usually capture the attention of the press.
The U.S. alone is home to more than 20 million millionaires so you could be living next a millionaire and you didn’t even know it.
Am I a millionaire myself? Gosh, I wish! But I’m working towards it by implementing the strategies listed in this article.
So I’m sharing with you four different strategies or routes that people take in order to become a millionaire. Between these four different million-dollar ideas or strategies, that you can implement, they make up about 99% of all millionaires today.
So most millionaires are taking one of these different strategies one of these different routes to reach that million dollar mark.
Beware of Uncle Sam With Your Million Dollar Goal
So you’ve set a goal to have a million dollars to your name. Great! But if you do want to actually become a millionaire you’ll want to potentially set that goal higher than just a million dollars. Why? Well it’s based off the fact that good old Uncle Sam is probably going to take about half of the money that you make.
So you might want to set that for closer to two million dollars if you want to become a millionaire. There’s certainly a difference between becoming a millionaire and making a million dollars.
You can make a million dollars but your net worth might still only be $500,000 or $600,000 depending on what state you live in and other factors so you want set the goal higher.
How To Become a Millionaire – How Others Have Done It.
So here are the top ways of becoming a millionaire, in descending of importance.
The first one we’re just going to touch on it ever so slightly but I think it’s actually quite important and that’s actually inheriting money. Now if you’re reading this article on how to become a millionaire, I think it’s safe for me to assume that you’re not a trust fund baby. I’m not a trust-fund baby so we’re in the same boat here.
The reason I mentioned inheritance money as one of the ways to become a millionaire is because there is a popular believe that most millionaires or billionaires inherited their money. Yes there’s some truth in that but that’s not actually the case.
If you actually look at the numbers and statistics, you would find that almost 80% of millionaires in America today did not inherit their wealth. Chris Hogan ran a study on this and interviewed about 10,000 different millionaires and found that only about 21 percent of them actually inherited any money whatsoever.
There’s an interesting book I read a couple of years back that will shutter all the preconceptions you may have about millionaires. It’s the Millionaire Next Door: The Surprising Secrets of America’s Wealth by Thomas J.Stanley and William Danko that says that only 20% of millionaires in the U.S. inherited their money. The remaining 80% are ordinary folk like you and me. Read it when you get the opportunity.
They worked hard and smart for their money through financial discipline and consistent saving, over longs periods of time. In other words they did not become millionaires overnight when a wealthy departed relative handed down their estate to them.
So my point is that a lot of millionaires are self-made. The same goes for billionaires as well. There’s a study that found that nearly 68% of the world’s billionaires are self-made.
This tells us that there’s a lot of room for people to build wealth over their lifetime. You don’t have to be born with a silver spoon in your mouth in order to reach that million dollar status. It’s much more difficult if you’re born with no inheritance to your name.
However, what you need to understand is that most of us don’t have silver spoon in our mouths. That should be enough motivation to inspire you and me to know we can do it too.
So let’s talk about the three real ways via which you can become a millionaire.
3. Building a Business
The first real way to become a millionaire is by building a business. I believe this is really the fastest way to become a millionaire. If you want to grow as fast possible in say a couple of years or maybe even less, having your own business is one of how to become a millionaire.
You may not be in a position where you don’t have a lot of money. Maybe have only $100 or $200 to spare and you want to find a way to increase this income or build wealth or you may have nothing at all to begin with and you still want to know how to become a millionaire without any starting capital.
Starting your own business is the way to go I believe. And you don’t have to come up with your own (next) Facebook or Snapchat. And there’s a reason why you don’t want to invest this money into the stock market, which I’ll tell you below.
But you can create a simple cash business like a lawn care business. With a couple of hundred dollars you can start a business like that. Then grow it to a substantial amount like $30,000 or $40,000. At this point you can then begin to look into investing in real estate or the stock market.
I’ll give you a primary reason for why you want to start a business or something that can really generate a lot of cash upfront.
Starting out with such a small amount of money has huge upsides and low downside to it. If you lose, all you’ve lost really is that small amount of investment. But if it works out, and it does have a high potential of working out, then you gain a lot.
Now imagine if you took this hundred dollars and put it into say in the stock market. Provided that you know exactly what you’re doing, you’re a really smart stock wizard and you could get an annual return of 15%.
After a year of of investing $100 you’ll have about $15. Now that’s barely enough to buy you a snack. Now there are other ways of investing in the stock market such as through index funds, but your returns are still going to be very minimal.
The problem here is when you’re starting with a smaller amount of money it’s hard to actually grow that money. Percentage-wise it could be nice but the actual amount of money that you’re gaining on those small investments it’s not really worth it.
So bottom line, it really is the best way for people to start when you’re really starting with nothing to go from zero to a million dollars in matter of years potentially.
So what if you still want to find how to become a millionaire but starting your own business is not something you’d want to get into? There’s still other options to becoming a millionaire without being a boss.
2. Hone Your Craft
The second way to becoming a millionaire is quiet interesting and it’s by mastering your craft through higher formal education. In other words, further your education so that you can move yourself up in the business or corporation that you might be working in at the moment.
If you look at the actual cost of college and the cost of going to graduate school for an MBA or Master’s degree in your field, you might think that’s a lot of money. However, when you check the numbers you will find that it’s still actually very worth it to go to college for a higher education.
The average MBA person who graduates with an MBA will see a massive increase in their salary. The average salary is about $115,000 or more for people who have an MBA. This goes up to almost $250,000 based on industry and the school.
So having a degree is or could be a great strategy for really increasing your income very drastically and rather quickly especially once you get past those first few years. That’s why the average salaries of CEOs of large Fortune 500 corporations is about $13 million per year.
Now there’s certainly a lot of tasks that you have to bring on but if you can work your way up through the system you can certainly see a very very large pay increase without having to start your own business.
So if you’re reading this article on how to become a millionaire and you’re completed your first degree, you may want to consider getting back to graduate school to help you rise through the corporate ladder.
Most career paths have professional designations, certifications and accreditation. Get them and increase your knowledge whilst at the same getting extremely well recognized and networked.
It’s certainly possible to start as a janitor and work your way to CEO level in a corporation. However, if you really want to be making millions of dollars per year you might want to consider somehow finding a way to reinvest the money that you’re making and put it into you into a formal education to work your way up through the ranks.
1. Smart Investments
Now we’ve come the final way on how to become a millionaire and this is through investments. You’re actually investing money that you have saved up. In my opinion, it’s the most likely the fastest way for people to become millionaires.
This is how the majority of millionaires are made through their own investments. The investments could be through real estate, the stock market, some other type of investment or maybe cryptocurrency investments.
I have been in the stock market for years and still do. However, lately a lot of my investments have been into businesses. I’m investing into my own business and working towards growing it.
I think I personally have more control over it and also the ability or at least I believe I have the ability to grow my investment by putting it into myself faster than what the average stock market might grow at, at about 7 – 10% per year.
If you have money saved now, you need to invest it into things like mutual funds, stocks and various other types of investments such as bonds or CDs (Certificate of Deposits) or anything else that you could think about.
Beware of Accumulating Unwanted Debt
One of the roadblocks that can prevent you from becoming a millionaire is debt. Some kinds of debt are good debts. These smart choice debts include money borrowed for home ownership and technical or college education.
Debt that is charged to credit cards for vacations, fancy clothing, electronic gadgets or things that have no lasting value will derail you faster than you can imagine if want really want to become a millionaire.
How to Become a Millionaire – Final Thoughts
It may bring you a great feeling knowing that you have a million dollars to your name. However, remember that whatever you earn you may end up having to pay IRS about 40%. So aim higher than a million dollars.
Becoming a millionaire may feel great but again you should aim for financial freedom. Depending on your situation, being a millionaire may not be enough. You should be at a place where money is no longer an issue.
It’s never too late or too early to have great financial goals. If you’re in your 20’s start saving and investing early and avoid taking on unnecessary debt. Don’t spend money until you’ve earned it.
So which of these ways on how to become a millionaire resonates with you? My mantra is personal financial discipline and investing in my businesses and myself. Let’s know if you have any questions, recommendations or comments.