Anyone Can Become a Millionaire by Following a Few Simple Steps in life
Becoming a millionaire isn’t all that difficult and there are countless ways to achieve that milestone. Some people do it through real estate, others start their own business, while some simply get lucky by winning the lottery or winning big on a game show. What is even more interesting is that you don’t have to be wealthy to begin with nor do you have to earn six figures to reach this goal.
I know some people who earn well over $100,000 and all they have to show for it is a large mortgage payment and a fancy car that depreciates faster than a glass of milk left outside in the summer sun. Anyone can become a millionaire and there are five things you need to do to have the best shot of making that a reality.
1. Earn Income from different sources.
Clearly, the more money you make, the faster you can reach that milestone, but that doesn’t mean your average Joe with a average income can’t obtain millionaire status. The current median income in this country ranges between $32,000-$62,000, depending on where you live. Better yet, get married so you have dual incomes. The wonderful thing about having dual incomes is that even with two people in the household, your income may double, but your expenses typically don’t.
If you don’t earn even an average income, all is not lost. It is up to you to do something about it. A negative attitude about your job or your earning potential won’t change anything. Be proactive and make the decision to improve your situation. It is your life, so take control and realize that things don’t change overnight. It may take a few years of slow growth before you reach the point where you want to be, but you can do it if you try. Remember, short of inheriting money from a relative or winning the lottery, you will need income to become a millionaire.
2. Live Within Your Means.
Ok, so you have income but now what? It doesn’t matter how much money you make if you spend it all or spend even more than you make. It might be nice to eat out at nice restaurants every night, or to always be on the cutting edge of designer fashion but, this will only make you feel like a millionaire. This doesn’t mean you have to live a miserable and miserly lifestyle, but you simply need to live reasonably.
Start by purchasing a home that you can comfortably afford and drive vehicles that suit your lifestyle without straining your budget. You don’t have to be pulling down $75,000 a year and drive a 1992 Civic Hatchback or live in a dump, but throwing your money at a 4,000 square foot home in a gated community with luxury cars or SUVs that cost as much as one year of your salary won’t help you become a millionaire. Some may argue that an expensive home and real estate in general is a good way to become a millionaire, but I will touch on that later.
3. Save Money.
This isn’t rocket science but if you earn a reasonable income and you live within your means, guess what, you will probably have money left over to save. The problem most people have is they put savings last, as an afterthought. People pay bills, buy things and then whatever is leftover they try to save. That is the wrong way to save. I’m sure you’ve heard it before, but pay yourself first. Whether it is $100 a month or $1,000 a month, think of the savings as a bill that needs to be paid and do it regularly. If you are unable to save money you will find that your only wealth is in the form of material things. Start saving today with a high-yield online savings account.
4. Invest your earnings wisely.
Now that you are saving money, you need to invest it wisely. Sticking it under the mattress isn’t going to help you reach your goals any faster. You don’t have to read the Wall Street Journal or watch CNBC everyday while actively managing your portfolio in order to be a good investor. Some of the best investment advice is to simply buy and hold and to buy low and sell high.
It is also important to remember that real estate is part of your investment picture, but it shouldn’t be all of it. Too many people stake almost everything they have into a primary residence and expect it to appreciate in value. Just like any investment, generally speaking, over time you will make money. There isn’t much debate about that, but relying heavily on real estate is no different than if you rely on one stock to fund your retirement. Start investing for free – trade stocks for free at Zecco. The Free Trading Community. www.zecco.com
You can become a millionaire by simply buying a single stock and holding onto it for 20 years if it goes up significantly just like you can buy a home $500,000 home and have it double in value in 20 years. Take a lot of the risk out of the picture by making sure all of your eggs aren’t in the same basket and develop an investment strategy that will provide steady growth.
5. Stick With Your Plan.
If you have done the previous four items the only thing left to do is to continue doing it and stick to the plan. As far as income is concerned, always be on the lookout for ways to increase your income, whether it is through climbing the ladder at your current job, finding work elsewhere, or maybe even starting a business on the side. Increased income will mean you can save even more, provided you aren’t foolishly spending the additional money. As that additional money gets tucked away into savings or investments it will continue to grow even more quickly.
It Isn’t Hard to Do if You Work at It
Unfortunately, most people are looking for a way to get rich quick or to capitalize on the next big thing. It is true that some people have made their wealth through playing the real estate market, while others have done so by investing in a few stocks that exploded, but this is the exception and not the norm. If the above list seems overly simplistic, that’s good. There are no secrets to becoming a millionaire and almost anyone has the chance to make it happen. The process is simple:
1. Make money
2. Don’t spend all of your money
3. Save some money
4. Invest that money
Certainly, there are many factors in play that can make this easier or more difficult for different people. This is simply the process that you can use in order to reach that goal, whether it is in 5 years or 50, if you follow a few basic steps you can do it.
How Many Millionaires are There in the World?
The word millionaire is generally used to describe a rich person. When we speak of a millionaire, we think about mansions, limousines and yachts. But what is the most accurate definition of a millionaire? The most recognized definition of a millionaire is a person who has financial assets of at least US$ 1 million, excluding the home value. Despite of the images that we associate with this word, the amount of US$1 million nowadays is no longer what is used to be some decades ago. Many people who have this amount today live without luxuries and do not feel rich. However, this amount is used as a measure to differentiate privileged people, who are known as HNWI (High Net Worth Individuals).
How many millionaires, or HNWIs are there in the world? According to the research made by CapGemini and Merryl Lynch published in the World Wealth Report 2006, there are about 2,669,000 millionaires in the United States , or about 0.9% of the population. In the whole world there are 8.7 million millionaires, or about 0.13% of the world-wide population. The total number of millionaires in the world grew 6.5% in 2005. They possess a total of US$33.3 trillions in financial assets. The majority of the millionaires are in North America (United States and Canada).
The table below shows the distribution of millionaires in the main regions of the world:
* North America – 2.9 million
* Europe – 2.8 million
* Asia-Pacific – 2.4 million
* Latin America – 0.3 million
* Middle East – 0.3 million
* Africa – 0.1 million
There is another level of extreme millionaires. These are the people who possess more than US$30 million in financial assets. These people are trully rich, and have the financial power to live in mansions, and to buy yatches. There are a total of 85,400 people in the world who fall in this level of wealth, and almost half are in North America. Although this level of wealth is practically unreacheable for the great majority of people, the goal of becoming a millionaire, or to be a HNWI, is completely viable for most people. If you have this objective you may be curious to know where the wealth of these millionaires comes from.
Here is a comparison of the origin of the wealth of the millionaires around the world:
* Business / business sales – 37%
* Wage income – 24%
* Inheritances – 18%
* Investments – 10%
* Restricted stocks/stock options – 9%
* Other – 2%
An interesting fact about the origin of wealth of millionaires is that there are significant regional differrences. For example, in Europe and Latin America the biggest portion of the wealth of millionaires (about half) is from business or business sales. However, in the Middle East, the biggest percentage of the wealth (36%) is from inheritances, and in the United States the biggest portion (32%) is from wage income.
If you want to increase your chances of becoming a millionaire, here are some interesting statistics:
* 61% of millionaires are more than 56 years old, although only 15% of the world-wide population belong to this age bracket
* 84% of millionaires are married
* 83% of millionaires have children
The great majority of the world-wide population (99.87%) does not belong to this exclusive club of millionaires. However, the chances of you becoming a millionaire increase substantially when you live in a rich country, such as in the United States. As we saw here, most American millionaires built their fortune with wage income. You do not even need to have a business to become a millionaire in the United States! Even if you are just an employee, you too can get there.