Everyone wants to be a millionaire, but not everyone reaches that coveted financial stature in life. But you’ll be surprised to know that, according to the World Wealth Report published by Capgemini and RBC Wealth Management, there are a total of 14.6 million millionaires across the world, an encouraging figure for the masses whose main goal is to reach a million dollars in net worth or at least retire with financial stability and success. To help you reach that point in life, here are eight steps to follow:
Delay Adulting
Many people try to achieve the milestones that mark adulthood as quickly as they can. Whether it’s buying their first house or starting their own family and children, these milestones are fairly expensive and, if timed poorly, can financially cripple you. If it’s an option, delay moving out of your parent’s home to save up on rent money or look for a small apartment unit where you can hole up for the next few years while you’re accumulating wealth. It’s financially irresponsible to pay $3,000 a month for 600 square foot of space in the city or in the Hamptons when you can get something for half that price in a less fancy neighborhood.
Get People on Board
Your financial success depends on you. But people are also easily influenced by the people around them including their family, children, friends, and peers. If friends keep nagging you to go barhopping or clubbing every weekend or your kids are bugging you to bring them to the mall to shop for new toys, you’ll never be able to save enough money to invest and retire with. Build a solid support group by informing your family and friends about your financial objectives.
Invest Your Money
Parking your cash in a savings account that yields one percent a year is no longer prudent investing. With inflation rates and cost of living steadily rising, you need to invest your money more aggressively. You can either start buying and selling financial products yourself or have your cash managed by more professional hands, such as Michael Loeb, a successful businessperson, and CEO of Loeb Enterprises. Allocating your cash into assets can be a delicate process as different assets have dissimilarities in risk and reward potential. A simple portfolio that anyone can do is a 50:50 split between stocks and bonds. Other higher-risk assets, like currencies, commodities, binary options, and cryptocurrencies, can yield higher ROI, but again the risks are raised to reflect the rewards.
Increase Your Base Salary
Your full-time job is your main source of income. It’s where you sink 40 hours of your energy per week, not to mention your prime income-generating years. You should be maximizing your take-home pay by either switching to a more lucrative career or moving up the corporate ladder. If you’re a full-time web developer, for instance, and is making $70,000 per year, look for a position that pays more, especially if you have the work experience to negotiate with. Regularly browsing online job portals can help you find higher paying job positions in your respective field.
Practice Frugality
A frugal lifestyle is arguably the simplest yet most powerful way to save money. Since lifestyle expenses are what consumes the majority of your income, drastically reducing it can have a long-term impact on your personal finances. Trim down unnecessary expenses, such as ordering through Seamless or GrubHub every night or paying for multiple content-on-demand services like Netflix and Hulu. You pay a higher rate for food through these online delivery platforms due to the sales and delivery tax plus tips for the delivery person. As for your fix of entertainment, consider only getting one COD service. Going for both HBO Now, Hulu and Netflix will cost you up to $45 per month.
Start a Business
If you wish to join the ranks of Michael Loeb and the others who live in the prime Hamptons area, you’ll need a money-generation business. Start a business by studying your market of interest and looking for a void or gap to fill. In fact, you don’t necessarily need an original idea; you simply need to be better at executing your product or service than your competitors. Before you start a business, ask yourself:
• What problem are you solving?
• How will you make money?
• What resources do you currently have?
• What’s your competitive edge?
Final Thoughts
Becoming a millionaire or at least reaching financial success, preferably before you retire, is a mix of small, strategic steps. You don’t have to be an heir of a wealthy business mogul or win the lottery to achieve your million dollar mark. By following the steps above with consistency, you’ll quickly amass fortunes.