Many people aspire to become a millionaire, but not so many people are pushing themselves hard enough to reach that particular goal. In a world where being a billionaire is now the new target for the rich, becoming a millionaire is a real possibility for many an average Joe, and it mostly comes down to good management, sensible thinking and occasional calculated risks. From studying numerous millionaires and success stories, I found out they have many traits in common we can learn from and emulate.
1) Start Preparing Yourself for Success
- Perhaps you want to reach millionaire status by a certain age, like 30.
- Or perhaps your first goal is just to be out of debt within two years.
- Break bigger goals into more actionable smaller goals. For example, if one of your goals is to have a growing business in a year, start with the goal of fleshing out a business model within the first month.
Be educated. Although there are a number of examples of millionaires and billionaires who never completed college, statistics show a link between education and wealth. The higher your level of education, the more opportunities are unlocked for you, and the higher the chance that you will become a millionaire. Importantly, education is not just limited to attending colleges or achieving degrees, rather it is a life-long process of self-improvement and constant learning.
Be tenacious. Success requires an ability to keep getting up after failures. There will be plenty of failures as you try to find the best ways to make a million or more. This isn’t about the safety net of an average salary and the boss’s orders being met each day. To become a millionaire, you have to be prepared to make decisions that won’t always succeed but if the risks aren’t taken, then the potential for success won’t be realized either.
Check your self-confidence. If it’s low, now is the time to build it up. High self-esteem and good self-confidence are essential traits to help you on your way. However, don’t let this delay you. You can fake it until you make it and the more you practice being confident, the sooner it becomes a part of who you are.
2. Start Successfully Managing Money
Stop spending and be thrifty. This is a key element of becoming a millionaire. Either you have the money in savings or you’re spending it on things. You can’t have both if you’re aiming to become a millionaire. Most millionaires (a net worth of $1 million to $10 million) are living a very frugal and cost-effective life, without hyper-expenditure.
Familiarize yourself with savings. If you’re used to maxing out the credit card and not saving much, you’re going to find it hard to become a millionaire at any stage in your lifetime. Begin by opening a savings account purely for keeping aside money and add to it regularly. This should be different from your every day savings account that you use to draw bill payments from and it should preferably be one that has a higher interest rate than your usual savings account options.
Invest in stocks. If you’re gung-ho for individual stocks, buy stocks of the companies whose products and services you use or purchase. One of the best ways to invest in individual stocks is through an investment club; you may want to consider forming one with your friends. However, whatever way you choose to buy stocks, get really sound and good financial advice first. Do your due diligence on that financial adviser – check their reputation and record of accomplishment first.
Buy mutual funds. Mutual funds are an investment of other investments. When you own a mutual fund, you own the securities (stocks, bonds, cash) within the mutual. With mutual funds, you are pooling your money with other investors and diversifying your investment.
3. Set Up A Successful Business
Have a frugal start up. There is much talk about “looking the part”. There isn’t much point looking the part if it cost an arm and a leg to get it and you lack clients to pay for it. Get yourself a fabulous suit that is worn every day and makes you feel confident and ready to meet people but be very careful with your office fit-out and other business elements.Here are some ideas to help you initially:
- Consider hiring offices that someone else furnishes, cleans and that get shared around. Spend only the time needed in them, to cut costs.
- If you do have your own offices, hire furniture or buy it cheap at auction.
- Lease anything that needs to be constantly updated, computers being number one in this group.
- Keep staff expenses under strict control from the beginning.
- Fly economy. Or use Skype and other online forms of virtual conferencing and avoid flying at all.
- Be eco-aware and turn off unused items all the time. Save the planet and your bottom line.
Monitor cashflow with an eagle eye in your start up business. This is one time in life where obsession is a good quality. Every cent counts and if it’s not in your savings or being churned back into your business, it’s in someone else’s pocket.
- Don’t neglect the viability of your business. Always pay attention to what isn’t working and remedy it at the earliest possible opportunity.
- Don’t neglect the mundane but essential parts of running a business, like timesheets, tax, petty cash, invoicing, etc. Do them with clockwork regularity or employ someone who is capable to deal with these things.
- Deal with bad debt as soon as it rears its head. It isn’t going away, so the earlier you face it, the better.
Find your business sweet spot. There are only three pieces to this. First, know your strengths that are unique to you, or at least where you can add unique value. Then find a market, a group of people, who want what you have to offer. Finally, you have to make sure those people will pay money for what you have to offer.
Define your brand. A brand is nothing more than a belief system that people have about you and your business. People will want to do business with somebody or some company they believe will solve a specific problem they have. You must be seen as the solution to that problem.
Create your business model. Your business model must be either high fidelity or high convenience. If it’s high fidelity you will have fewer customers who will pay a lot. You need 100 customers at $10,000 each to make $1 million. If it’s high convenience you will have many customers paying you small amounts. You need 100,000 customers paying you $10 each to make $1 million.
Decide on your exit strategy. The simplest way to make $1 million is to create a business, an asset that you can sell. People will often pay two times the annual earnings for a business. That means a $500,000 a year business can be sold for $1 million. That beaks down to having a business that makes roughly $40,000 per month.
Make more profits from existing customers. The fastest way to increase your income is to sell more products and services to your existing customers. Find ways to add even more value, and offer the products and services to your existing customer base.
Build systems and scale up. This a key entire secret to a massively accelerating your income growth. If you create a product that sells for $100, and you know that $50 spent on advertising consistently produces one sale, you have a winning model, as long as you’ve picked a large market. Scale up.
Hire great people. One of the biggest way to go from a $60,000 a year income to a multi-million dollar business is by hiring great people. This is why all the large corporations focus on team-building and leadership. It is the only way to have a great team is to be a great leader.
About the Author
This article was submitted to The Asian Entrepreneur by Jason Cowell, a business blogger who aims to coach people on how to achieve limitless success.