Put in place some or all the following strategies and you may be on your way to becoming a millionaire:
1. Save for Retirement
This can be the simplest way to earn money, especially if you start early. All you need to do is open a retirement account where you work, and deposit money into it from every paycheck. To maximize your earning potential, start young and put in the greatest amount.
As with any long-term investment, the more time you have for earnings to compound, the more money you can make. If you are wise with your investments, contribute a high part of your salary. And have time on your side, you will be well on your way to becoming a millionaire.
2. Live Within Your Means
You could live in a 4,000 square foot house and drive an over-sized SUV. Or you could live in a more modest-sized home and drive a ’95 Honda Civic. The first option may help you to keep up with “the Jones,” but the second option will help make you a millionaire.
Keep your living expenses well within your means such that you can save for your future. Many people even choose not to flaunt their money once they become wealthy.
3. Stay Out of Debt
This goes hand-in-hand with living within your means. Get out of debt and stay out of debt. To be a millionaire, make decisions that will prevent you from getting into debt in the first place. Or if you must, have a timeline and a plan to pay it off.
For example, if you must take on some debt to expand your small business. Know how and when you can pay it off before you proceed. Further, consider saving cash for big purchases. Even if you decide to go with a low-interest loan on a car. For instance, maintain an equal amount in investments to pay off the loan if necessary.
4. Earn Extra Income
Earning extra income to contribute to your savings. Or turning a side business into a full-time business venture can both be ways to become a millionaire.
For example, let’s say you earn $10,000 a year in your second job and invest all your earnings for ten years. If you let it grow for another 20 years and it earns 8% every year its invested, it would turn into $675,214! Some ways to earn extra income include. Freelance writing, web design,dog sitting and tutoring.
5. Invest Wise
Investing can be intimidating, especially if you are new to the process. It’s best to know that while you can make a fortune through investing, others can make a fortune through you as well. In other words, seek low-cost investments, especially if you’re young and have time on your side. Brokerage fees or annual investment expenses reduce your annual earning by 2% or more. That may not sound like much, but it would decrease your earnings in the example above to $422, 726, a loss of $252, 488 or 37%!
6. Get an Education
Almost 25% of millionaires are professionals, such as a doctor, lawyer or an accountant. Each of these high-paying professions need a large amount of education. But, make sure you have a smart plan for paying for your education. Before you find yourself in a heap of student loan debt after graduation.
7. Pay Your Mortgage Off Early
By paying your mortgage off early, you avoid paying what could be hundreds of dollars in interest. Then, once your mortgage paid off, you can contribute the same payment amount to your own savings. Sometimes it can make sense to maintain a low-interest mortgage payment. Because you get to deduct the interest you pay every year on your taxes. Since the interest you pay saves you money in taxes, this lowers your mortgage interest rate.
This will make sense if you’re depositing money in investments that return more than your mortgage interest rate. Either way, make sure you’re getting out of debt. Or your investments are returning more interest than the amount of interest you’re paying on your debt.
8. Start a Business
While this is one of the riskier options, it is one that can pay off. About 25% of millionaires are professionals and the other 75% are entrepreneurs. Starting a business takes hard work and courage, and it’s not for everybody.
9. Network With Like-Minded People
It’s amazing how we become like the people with whom we have relationships. If you surround yourself with people who have bad habits, chances are that you will get those same bad habits. But, if you surround yourself with people who have impressive financial goals. You also will shoot for similar goals. The pressure put on you by successful peers can act as an impetus for personal success.
10. Have Your Money Work for You
The easiest way to earn money is by letting your money work for you. One way of doing this is through earning passive income, such as by owning rental properties. Starting a business can also earn you passive income. Once you get it running and hire employees to manage day-to-day operations. Another great way of having your money work for you is through dividend stock investing.
11. Stick to Your Plan
Remember, you must have perseverance to become a millionaire. Whatever plan you come up with, you need to stick to achieve your goal. Consider the legendary investor Warren Buffet. Who at a young age invested and started many businesses and met many failures. He stuck with his investing, business principles and continued to pursue his goals in spite of obstacles. This is what has made him one of the wealthiest people alive.
12. Do Something You Love
Choose a path that allows you to pursue something you are passionate about. You’ll enjoy the journey a whole lot more and have a much higher chance for success.
It’s tough to achieve the American dream of being a millionaire. That’s why it’s called a dream. Practice the qualities of patience, perseverance, hard work, sacrifice, and courage. To put yourself in the best position for success. Know your strengths and use them to your advantage. Know your weaknesses and prepare for obstacles you may face because of them. Lay out your plan, and then go to it with all you got.