Maybe your thought is that the only way you can become rich is by hitting the lottery, winning big in Las Vegas, or inheriting your family money. However, you can become rich outside your thought. The people that start while young and learn the development of the right habits have a great opportunity to become a millionaire. The development of the attributes required to multiply wealth and reduce debt is possible at any age, only if you follow the steps to become a millionaire.
The following are the seven steps to becoming a millionaire
- Come up with a written financial plan.
- Learn to save immensely.
- Do not live above your means.
- Stop debt accumulation.
- Get the right investment for you.
- Start your own business.
- Contact experts for advice.
According to Jason Flurry, debt hinders people from moving ahead. Jason Flurry holds a certification in financial planning, and he established Legacy Partners Financial Group in Woodstock, Georgia. As the President of the financial group, he believes that debt makes people pay forever.
If you desire the achievement of a seven-figure net worth, you need to learn not to spend more than you make, live modestly and never upgrade your lifestyle for each income raise.
It’s a matter of choices
It is not about buying cheap things for your use. However, you should not buy what is so expensive now, what you do not need now. You can do without an expensive car, the biggest refrigerator, and the largest TV with the latest technology.
Some individuals who prefer wealth to material things understand that their money can do better things and are unlikely to consider spending money on the biggest and latest things.
They do not consider buying a “liability” as they understand that it is likely to bring tension. Hence, they are likely to prefer the purchase of an asset, that is, something whose value will increase over time and bring them a return on their investment.
According to Flurry’s experience, it was difficult for him to make some of his older clients spend their money.
This is because they have been used to saving money all their lives and they cannot imagine spending thousands of dollars on vacation. He explained further that it is not about them being worth millions of dollars.
Based on the advice from individuals who have made a million, the following seven(7) steps can help anyone become wealthy.
It is not just about proclaiming your desire to be wealthy. It is necessary for you to develop a plan that can work and write it on paper.
From the words of Stewart Welch, the plan you write propels you to take action.
According to him, you need to make calculations about your desired earnings and the way to invest. The plan is beyond the goal; it is everything. It consists of the dream, the goals, and the options.
Additionally, he explained that the options stand for “scenario planning.” It consists of the way to ensure the accomplishment of the goal like contributing to a 401(k).
2. Learn to save immensely
You should end your financial plan with an organized investment. You must cultivate the habit of saving money. Prepare for unforeseen circumstances requiring expenses by putting some money into an urgent fund in a money market account, so you don’t have to take out the remaining of your savings and investments.
Find a way of saving a minimum of half of every pay raise.
Examine your savings options such that you are obtaining the best return on your contributions. Open a savings account and consider your retirement fund.
You can obtain the best from your savings by diversifying it.
3. Do not live above your means
You can run into debt and needless liabilities in no time if you choose the “treat yourself” way of life.
Avoid overpriced materials – designer clothes, shoes, sunglasses or jewellery.
Likewise, make sure that your house or car payments are not beyond budget. Calculate the cost of a house you can afford using Bankrate’s mortgage calculator.
4. Stop debt accumulation
It is a common saying that if you can eat it or wear it, don’t put it on your credit card. Despite that being a good thing to follow, go beyond it. Put in efforts not to put whatever you will be unable to pay off within 2 to 3 months on your cards.
It is not needful to have more than one or two credit cards. Pay off the ones you have when you have sufficient and do not forget that debts limit you.
According to Welch, it will not allow you to put cash into other things, even investments. You will be better off if there was no one to borrow your money, he said.
5. Get the right investment for you
You need money to make money. However, that is not saying that you should wait until you get much money before you invest.
Get an account with a mutual fund company without no-load funds and low expense ratios. Come up with a portfolio of diversity that will help you to earn between 8 and 10 per cent every year on your investments in the long run.
Consider real estate investment if there is sufficient cash to buy property. Additional income can be obtained by renting helping you to earn money on a long-term basis through appreciation.
The stock market is another place to consider for investment. You can use an online broker.
There are passive income opportunities you can consider for diversification and increment in investments. Some of them are sales of informational products or the choice of stocks that yield dividends. Such stocks will help you remove spending and save more and have long-term investments.
6. Start your own business
Thomas Stanley and William Danko mentioned in their book “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy” that two of three millionaires are self-employed, and most of the individuals in the group are entrepreneurs. The remaining individuals are professionals like lawyers and engineers.
The majority of the wealth of a country comes from entrepreneurs. According to Fidelity Investments, the majority of upcoming millionaires in the making made or have increasing assets on their own. That is also the same for many millionaires as well.
7. Contact experts for advice
While you are trying to build a portfolio, you can contact a good financial planner to help you with the right investments and avoid the wrong ones. As this can be complicated, what you require is the formation of a good relationship with a professional.
Over six out of ten millionaire investors utilize financial experts for the management and protection of their wealth, says Fidelity survey.
It is possible that getting the right adviser will help tip the scales toward the seven-figure milestone. Some advisers can look into your portfolio and recommend necessary things for a one-time fee in case you are unable to afford the cost of using a financial planner to manage your money.