My wife reads my site and often sends me links to stories and other ideas. The other day she sent me a link to a recent MSN story, 8 Ways to Make a Million bucks. The article chronicles 8 different millionaires and shares a brief story about how each of them reached millionaire status.
As you would expect, the stories are as diverse as the people they highlight. Several people started their own business, one man made his millions in real estate, a firefighter cashed in his pension, and another made his millions working an $11 an hour job (and making wise money decisions along the way).
I sent my wife a quick e-mail thanking her for the link and when I closed the e-mail, I wrote, “I wonder what our millionaire story is going to be?”
Her response: “You think we will have one?”
Me: “Of course, it’s only a matter of time.”
And I believe that. I don’t know what it will be, and it may not be glamorous, but we will be millionaires. It’s only a matter of time… and a few other factors.
How to become a millionaire:
Becoming a millionaire is not extremely difficult. It takes money, time, discipline, and a little luck. All you need to do is follow these 5 steps:
Earn Money.
Unless you are born into riches, inherit wealth from someone or strike it rich in the lottery, you need income. And as this 78 year old man proves, you don’t need to earn a lot of money to become wealthy. It’s what you do with that money that matters.
My wife and I earn a decent living, but if and when we have children, we will move down to a one income household. We have been preparing for that day, so we should be able to handle it financially. Even so, I am trying to earn more money through this website and other online ventures which should increase our income and soften the blow that comes from moving from two incomes to one.
Spend Less Than You Earn.
My wife and I have done fairly well with our finances. One reason for this is that we spend less than we earn. Another, and perhaps better, way to look at this is to earn more than you spend. Don’t get me wrong, I think spending money is good. But living within your means is the key to financial success. If you can combine both of these principles, earn more and spend less, you will be ahead of 95% of the world.
Save and Invest.
Money saved is worth more than money earned, and you should take advantage of that principle. Once you have a surplus of money, you need to do something constructive with it. Saving and investing is the best way to do that. Compound interest has been called the strongest force in the universe, and you want that force working for you. There are many ways to invest, and as long as you make wise investment decisions and let time and compound interest work for you, you will be successful. Start by paying yourself first.
Repeat.
Earn money, spend less than you earn, save and invest, repeat. After that it’s just a matter of time. Even if it takes years or decades, the process really is that simple.
Is it really that easy? Yes. It may not seem as easy as I laid it out here, but it really is. Remember, this is not an overnight get rich quick scheme. It takes time, planning, and a little luck along the way.
Get started. If you want to become a millionaire, you need to decide to do it and get started. If you are not be able to save money right now because of debt or other financial obligations, you should work on those issues first. A good place to start is with Dave Ramsey’s Baby Steps. This is a tried and true method for setting up an emergency fund, paying down debt, and beginning your investments. Once you have that started, you can begin your million dollar journey.
Read more about becoming a millionaire:
- How to become a millionaire – earn money.
- How to become a millionaire – spend less than you earn.
- How to become a millionaire – save money.
- How to become a millionaire – invest money.
- How to become a millionaire -repeat.
What will your millionaire story be?
{ 35 comments… read them below or add one }
I am hoping my success story involves a combination of the blog and consulting. I’ve been really struggling with the consulting lately in an attempt at networking and obtaining more clients. Between the two blogs, keeping up with industry, and maintaining an amicable family relationship I find I am short on time. My wife has not worked for over 2 years so we are on a single income. We do have a child who takes a lot of time and money.
It is a lot harder when you only have one person working. Yet she has been looking at jobs lately and the pay is sub par. In fact one job was offered to her where if you do the calculations. Including gas, day care, and lunch she earned roughly 5 dollars a day. At that point it isn’t worth her working.
Anyway, I’m hoping some day sooner than later I will reach that millionaire status. Takes a lot of work, and a lot of patience
Everything is only as hard as we believe it to be. When people can start with nothing, and I mean dirt poor nuthin’ and wind up filthy rich, no one with a properly functioning mind has an excuse.
The difficulties lie only in the mind.
One day man one day. I have finally gotten my finances to a point where I can see how this will be possible just have to get it done now.
I’m exactly sure how our millionaire story is going to pan out either, but I am quite confident that it will happen (someday).
I think the trick is staying focused but not become overly obssesed with the idea.
Finding a steady financial plan that you can stick with is key. It also doesn’t hurt to pursue a job that you love.
I can rest assured that my Blog will not be an intergral part of my attainment of “millionaire” status, but at least it can be used as a medium to track my progress along the way!!
Benjamin, I plan on using my blog to help keep me on track as well. In fact, I wanted to name my site “Million Dollar Journey,” but that domain was purchased a few months before I started blogging. I’m happy that Frugal Trader ended up with it though, because he has a great site!
I read that article, too. As much as I like to be an optimist, I must admit that I don’t think I’ll ever be a millionaire. I think I can do better with my finances and build a more secure future. But, I don’t think I’ll have a million or more unless I get really lucky and hit the lotter!
The process does seem easy, if we manage to master the all mighty earn more than we spend. Still how we handle the bumps along the way will make a big difference.
I have no doubt that you and family will end up millionaires. And you can tell your wife I said that.
Best regards
This is how I live already, I’m not a millionaire YET, but I am comfortable and satisified and in the end thats what really counts.
Don’t let people put you down. You can become rich as long as you know your path were your going and know what your doing. Anyone can become rich, here’s some idea of becoming rich, catering to the rich people, selling private jet planes to people. Make your own websites and when it has a value sell it off, but to whome? see the problem here is that you got to know the right people, and talking about makeing websites believe me, you can sell your websites for 10million and or less it really depends on the value and effort of time that you put in it.Ex,Look at tom a Young adult who is the maker of myspace. everyone thought that myspace probably something thats going to be laim but Tom waited and as time goes by the whole world know’s about myspace now. And lets see he sold his website to some rich company for 2million and he’s living off from the money. and talking about lottery believe me there is only a 00.001/2 chance of winning only don’t dream about it.
sincer,mv
Your advice is golden, but what captures my curiosity is: are YOU a millionaire,Mr. Patrick. How can your words HELP me if they hav’nt helped YOU?
Mark: No, I am not a millionaire at this point. But one does not need to be an Olympic athlete to coach an Olympian.
“How can your words HELP me if they hav’nt helped YOU?”
I think you missed the point: these words have helped me. I have no consumer debt, a reasonable mortgage payment with a lot of equity, a healthy retirement account based on my age and income, and strong professional prospects. I earn money, live within my means, save and invest that money, and repeat the process. I am well on my way to becoming a millionaire, and I wish you the same success.
I have practiced the same debt elimination and savings techniques for years, and do so quite aggressively, though more conservatively than one of my best friends. I am 60% there in savings and my only debt is my mortgage payment. My best friend in 23 years reached 130% of his goal to become a millionaire. He began with $3000 and was more aggressive in his investing than I have been. My point is, he made it…retired last year and is living off his retirement, social security and investments to the tune of $150,000 per year. He owns two homes, bought a boat and is traveling and enjoying his life to the fullest. My goal is to follow in his footsteps. All of this takes discipline and sacrifice, but believe me it can be done by anyone, so don’t think this is a bunch of bull…anyone can do it, but you MUST make saving a life time habit. Set short term savings goals and work hard to reach them. Once you reach a short term savings goal, set your next savings goal and continue to work hard to reach it. Then repeat, repeat, etc.
Good luck with your mission, my friend. (I’ve added a comment elsewhere saying I don’t think targeting net worth is the best way to financial freedom, but I fully applaud your ambition!)
One pointer — have you considered income protection insurance (or whatever the equivalent is in the US (I’m writing from the UK)). A lot of your eggs are in the ‘earning’ basket, rather than the ‘passive’ basket at present, so it may be worth protecting yourself in case the worst happens. (God forbid).
Monevator: I don’t think a net worth goal is the way to go either, but a lot of people put stock in a number (it’s an easy concept for a lot of people who are new to personal finance). Personally I’m going for exactly what you mentioned – the crossover point where my investments are earning me more money in passive income than my day job. That is when I will feel financially free.
We do have disability income here in the US. I have a bit, but probably not enough. My wife and I plan on going over our insurance situation here in a couple weeks, so I will look into it then.
“Whats the quickest way to become a millionaire?”
Start off a billionaire and set up an airline.
Usually attributed to Richard Branson, though I suspect he got it from someone else.
On a serious note, I like the idea of “thinking big”. For example, starting your business can certainly be the beginning of becoming a millionare. But, you really have to think bigger…like a plan to franchise the business, create a new market, etc.
One of the best ways to becoming a millionaire is investing in real estate. Let’s face it.. the market is unstable. Though there is negativity around real estate and though it does take more time and effort to become rich..it is still the way to go. Where do you think Donald Trump made his millions? How do you think he got started.. real estate. SO, if you’re ready as I am, get a copy of “The Pizza Delivery Millionaire” by Rick Vazquez. Unlike many other books out there that might be geared to people who already know something about real estate, this book is simple yet offers great suggestions on the keys to becoming successful. This is the year for me!
Joshua: Real estate is definitely an avenue to becoming a millionaire. I only have a primary residence at the moment, but I think that may change later in life. The beauty of real estate is cash flow, whereas stocks and other equities don’t produce much cash flow outside of dividends (at most 3-5%). Good luck with your endeavors.
According to what I read it is much easier than ever before to become a millionaire nowadays. There are more millionaires now than it’s been. And this is mostly attributed to the home values in the past years. Home equities and rising appreciation of real estate makes it possible to a lot of Americans to be considered millionaires. However, the past two years the real estate market has been hit hard, home values have depreciated back into the 2003 level.
That’s true – housing prices have made more people millionaires than in previous years. But the housing bubble and subsequent market crash erased a lot of those millionaires. There are more ways to get there though – which is what I am working on. Slow and steady.
I think that the ultimate step in becoming a millionaire is to be frugal, save more than what you spend, and learn the fundamentals of investing like stocks, real estate, bonds, etc.
Set goals and be focused on those goals. Surely, it will be reached soon. This is what I did and I’m quite close in achieving it in our local currency at athe age of 26.
This is a good article and very convincing ideas to hit that first million
I’ll be more than a millionaire, I don’t doubt it at all. The hardest part is starting your way up the curve, since that’s when the snowball process of compounding takes the longest to kick off. Once you reach a critical mass, the last… say… third or fourth of the journey will be relatively easy. If you’re in the right investment allocation, the real question is how soon can you make it to $750,000 in net worth? Or how soon can you start bringing in income from a second investment property? No, friends, a million is not far off at all…
The steps above might not make us all millionaires, but surely it is the right path to more money. If you try just to make a quick calculation on how much money you actually could put away to earn interest, you might be amazed how fast that money will grow over time
I think that the whole idea is just plain old belief, once you have that, thinks should fall in place. Belief my problem.
i’m 13 years old and working hard to make my dream come true. I have to get it right the first time!
i have the surplus, but unable to either invest in the stock market or decide to do anything with it.
i used to handle money very easy and let go very easy.
but i am grwoing and afraid to take risk.
i do want to own a busines one day,
i hope someone give me some idea,
I would suggest NOT including any property or illiquid assets not readily sellable into your Millionaire calculation.
I’m focused on building a $3million Cash Nut by age 42, and whatever else I have, be it property, 401K, private equity investments is just gravy.
Don’t depend on anything else except for The Nut!
Rgds, RB
I’m 27 years old, I am married to a doctor in residency, just bought our first condo in boston have a roth account a 401k some precios metals. I want to be doing so much more but kind of stuck not knowing what to do next. We are working on paying off debt from my wife’s med school and the condo. Does anyone have any advice? I have a finnacial advisor also and he just tells me to keep investing! I need more direction then that! I’m 27 there’s a lot to learn still…. I’m currently working on making more money at my job just have to wait for the big promotion. Please help?? Thanks guys
AJ, If you are just getting started with your path to financial freedom, I recommend taking a look atDave Ramsey’s Baby Steps, which is a step by step method for achieving financial freedom.
There are many other great ways to get ahead, so I recommend searching for the way(s) that work for you.
Along the way you will want to pay down debt, invest, look for ways to earn more money, look for ways to save money, and balance that with the rest of life. I know those are broad strokes, but each situation is different, and that is the best I can do without knowing more about your situation.
Best of luck to you and your wife.
Dear AJ,
Two thoughts come to mind. First, at 27 you have a whole life in front of you, so whatever you do will be right if it is directed correctly. Second, pick a goal and work towards it (e.g., pay off medical debt; or pay off condo mortgage). Always remember, as you succeed in any one of these, then you can broaden out into other investments opportunities (e.g., stocks, mutual funds, real estates, etc.). The choice and timing are yours to call. My basic point; however, is while you are young “focus” on a GOAL and go after the goal aggressively.
will for me the key to become millionaire is first study complete your education. second seek a job. Third save while planning. Fourth invest wisely.
If you study, your brain has a knowledge. not only in school but also study the community`s needs.
Put up a business. when you have a business you will mature about financial consequences.
Yep, you hit the nail on the head. If you have 20-30 years to do it, it really isn’t that difficult for even average income earners…
Because of the real estate bubble, the current definition of a millionaire is one who possesses a million dollars in net worth excluding the value of their home.
I think the ultimate way to become a millionaire is to EARN MORE and DESIRE LESS. Earning more increases your income i.e. (taking a second job, investing your money, buying assets that provide passive income, etc.) while desiring less lessens your spending (i.e. budgeting, frugality, etc.)
Make it a habit and definitely, you would become a millionaire someday.
I think to become a millioner is a destiny. Without blessings from God is nothing. Even if you work hard, even you earned more money if its not your destiny you will not be a millioner. God will give ways that your earned money will be spent. But don’t lost hope just keep on working of your plan to become a millioner together with prayers… then may be its your destiny.