Many have the ambition to become millionaires, but few roll up their sleeves to make this dream come true. In a world where the new goal for wealthy people is to become a billionaire, the one million euro milestone is a real possibility for many ordinary people. Achieving this goal requires good management, a judicious way of reasoning, the ability to take occasional and calculated risks.
Steps
Part 1 of 3: Preparing for Success
Step 1. Set concrete goals
Good preparation is absolutely necessary to tackle such a large and challenging undertaking. The first thing to do is to propose concrete and measurable goals that you can keep under control.
- Maybe you want to reach millionaire status ahead of a certain age, like turning 30.
- Your goal may also be to pay off in two years.
- Divide challenging goals into small, doable actions. For example, if one of your goals is to start a business and make it successful in one year, make it your goal to develop an accurate business model in the first month.
Step 2. Get adequate training
There are numerous examples of millionaires and billionaires who never graduated, but several statistics demonstrate a strong correlation between education and well-being. The more advanced your degree, the more doors will open to you, so you will have a better chance of becoming a millionaire.
Step 3. Take care of your physical well-being
If you want to earn and make sound financial decisions, good health is essential. Keep fit, eat healthy and don't neglect your body. Only if you are well will you have the energy and resources necessary to work hard towards the final goal.
Step 4. Be persistent
To be successful you need to keep getting up despite your failures. As you look for the most effective ways to earn your first million or more, there will be bitter disappointments. It is not about earning an average salary, having financial guarantees or following the orders of the boss every day. To become a millionaire you have to be prepared to make decisions that won't always work out. But if you don't take risks, you won't be using your full potential to succeed.
Step 5. Make sure you believe in yourself
If you have low self-esteem, now is the time to cultivate it. Self-esteem and personal safety are essential traits to get ahead. In any case, don't let yourself be held back by your insecurities. You can always pretend to be safe until you really are. The more you foster your self-esteem, the sooner it starts to become part of your identity.
Step 6. Read tips from who made it
The wisdom of the people who arrived can benefit you and inspire you, but try not to get stuck in the planning and preparation phase. The most important step is to take action. Either way, take the time to read the advice given by other millionaires. Here are some interesting books to read:
- "The Millionaire Mind" (2010) and "The Millionaire Next Door" (2011) by Thomas J. Stanley.
- "Beyond Wealth", by Alexander Green.
Step 7. Look for a mentor who has walked the same path and ask him for advice
Surround yourself with millionaires who broke through. You can find them in several places. There are even private clubs online, where you can have a mentor who will personally show you how to make a profit in many areas of the web and real life.
Part 2 of 3: Manage Money
Step 1. Stop spending and live frugally
It is one of the secrets to becoming a millionaire. There are two lifestyles: one aimed at spending and one aimed at saving. If you have the ambition to become a millionaire, you can't have both. Most millionaires (we are talking about a net worth between one and ten million euros) live in a very simple and profitable way, without crazy expenses. Here are some examples:
- Live below your means. As far as your housing situation is concerned, you should generally not spend more than a third of your salary on rent.
- Buy quality clothes, but don't spend crazy bucks. A well-made suit paid for a few hundred euros will do just fine.
- Wear cheap watches, jewelry, and accessories.
- Don't collect anything.
- Drive a reliable but affordable car made by a subcompact brand.
- Avoid prestigious and luxurious brands.
- Stop comparing yourself to others and trying to keep up with their lifestyle by spending.
Step 2. Make a habit of saving
If you have holes in your hands and you tend not to be savings oriented, it will be difficult to become a millionaire in the future, you will probably never succeed. First, open a savings account simply to save some money and work to increase the amount saved on a regular basis. It should be different from the checking account you use every day to pay bills and other daily expenses. Preferably it should have a higher interest rate than the classic one.
- Having a deposit account is one of the many methods that allow you to invest and capitalize. Your initial deposit will have an increasing return on interest, but you need to keep saving for your nest egg to rise. Learn about the different types of accounts, including retirement funds.
- Saving involves strict discipline. Try to correct those bad habits that keep you from being diligent. Focus on what you can achieve by saving, instead of hoarding and flaunting unnecessary things to be envied or accepted by others.
Step 3. Invest in stocks
If you are in favor of investing in individual securities, buy shares in companies that offer products and services that you usually use. One of the best ways to invest in individual stocks is through an investment club - you could try starting one with your friends. In any case, whichever mode of purchase you choose, first try to get solid and useful financial advice. Before you go to a financial advisor, do all your research: check their reputation and achievements.
Investing in blue chips may be slower and less exciting than other stocks, but they are the strongest in the long run
Step 4. Buy mutual funds, which are essentially investments of other investments
When you own this fund, you also benefit from its securities (stocks, bonds, cash). In this way, your capital flows with that of other investors and you diversify your investment.
Part 3 of 3: Getting into Business
Step 1. To decide which business to run, analyze the needs of consumers, not just your needs
There will always be a good quality product or service that others will want and want. Think recycling, creating energy, supplying products in healthcare or niche sectors, and so on. Also, don't overlook or take lightly on building a strong customer base. Choose a business that truly meets their needs. Make an effort to offer products and services that are the best in the market, the most competitive from a price point of view or unique.
Step 2. Set up a small start-up
Many believe that it is necessary to play the role of the entrepreneur well from the beginning and to show oneself perfect for the part. But all this doesn't make much sense if it costs a fortune to get it and you don't have enough customers to afford it. Buy a pair of good quality suits that make you feel confident and ready to meet members and customers. Instead, be frugal about office furnishings and other related items. Here are some ideas that will help you initially:
- Try to temporarily rent shared offices that are furnished and cleaned by someone else. To cut costs, spend only the time you need.
- If you have your own offices, rent the furniture, otherwise buy it at a low price at an auction or on the internet.
- Rent all equipment that needs to be updated constantly, especially computers.
- Keep a close eye on all staff-related expenses right from the start.
- Fly tourist class or use Skype and other teleconferencing tools to avoid traveling.
- Try to be eco-conscious and always turn off unused devices. You will save the planet and your finances.
Step 3. If you run a start-up, carefully monitor the cash flow
This is probably the only situation in which obsession becomes a virtue. Every single penny counts - if it's not saved or invested in your business venture, it will be pocketed by someone else.
- Do not overlook the feasibility of the entrepreneurial initiative. Always pay attention to malfunctions and remedy at the earliest opportunity.
- Don't overlook the tedious but essential parts of running a business, such as working hours, taxes, petty fund, billing, and so on. Do it regularly and on time or hire an expert who can do it for you.
- Deal with larger debts as soon as possible. They won't go away on their own, so the sooner you fix the problem, the better.
Step 4. Find out the optimal factors of your business venture and exploit them
This step is divided into three parts. First, know your unique strengths, or which you can give a unique value to. Next, find a market or group of people who would like what you offer. Finally, you need to make sure these people are willing to pay for your product or service.
Step 5. Define your brand
Basically the brand is a name or a logo that allows to identify a product or a service and the company that offers it. A person is willing to enter into a business relationship with a firm or business deemed capable of solving a specific problem. Customers must consider you the solution to a given problem.
Step 6. Create a business model
It must be based on high loyalty or high convenience. In the first case, you will have a small clientele willing to pay a lot. To make a million, you'll need 100 customers to buy something worth $ 10,000. In the second case, you will have a larger clientele who will pay smaller amounts of money instead. To make a million, you will need 100,000 customers to buy something for $ 10.
Step 7. Establish your exit strategy
The easiest way to make a million is to have a business venture, an asset that you can sell. A firm's selling price is often twice its annual revenue. This means that a company that earns 500,000 euros a year can be sold for a million. You should therefore have a business that bills around 40,000 euros a month.
Step 8. Earn more profits from existing customers
The fastest way to increase revenue is to sell more products and services to the customers you already have. Try to find ways to offer higher value for goods and services to appeal to your existing customer base.
Step 9. Set up systems and expand them proportionally
It's one of the main secrets to dramatically accelerating revenue growth. If you produce a good that you sell for € 100 and you know that an advertising investment of € 50 regularly generates a sale, you will have a winning model, provided you have chosen a large market. At this point, gradually expand the system.
Step 10. Hire good people
Having skilled employees is one of the most effective tactics for transforming a company with a turnover of 60,000 euros a year into a multimillion-dollar colossus. This is why all the larger companies place so much emphasis on teamwork and leadership. The only way to have an efficient team is to be a good leader.
Advice
- Read. If you are educated and informed, more things will seem possible and you will be able to do more.
- Don't just think about money. Your business venture must also be fun. Sure, your goal is to become wealthy, but few rich people feel rewarded just because they have a six-figure bank account.
- Look for a system that has proven effective for many would-be millionaires. Here are the five most profitable sectors today to reach your goal: technology / internet marketing, direct marketing, home-based businesses, product distribution and investments (stocks, bonds, development and real estate investments).
- Help others. Cultivate your more selfless side - make the world a better place for you and those around you. If you transmit positivity, you will receive just as much. Also, doing charity can come in handy for tax deductions.
- Don't overdo the use of your credit card: excessive spending will haunt you in the future and you risk getting into debt. For everyday purchases, use a debit card - it's much easier to manage. The credit card must be reserved for emergencies and must be used sparingly in order not to have creditworthiness problems.
- Make friends with people other than you. If you are open to welcoming varied points of view, they can be a great source of inspiration and guidance.
- Never invest more than you are willing to lose. This is especially important in the beginning. Once you grow up and have more experience, you will likely take fewer risks or be able to tackle them from the height of your knowledge.
- If possible, find out about supplementary pension funds and supplementary retirement plans offered by banks and other financial institutions.
Warnings
- Try to put economic well-being and wealth into perspective, don't kill the goose that lays the golden egg. In other words, don't overlook the source of your income, such as good health.
- The internet is teeming with scams. Don't invest money carelessly, only do it if a proposal is serious.
- Other than saving your money, no one guarantees you that stocks will make you money. You should be wary of anyone who tells you otherwise.
