Do you dream of becoming a millionaire? For many, it’s a distant aspiration, but achieving this financial goal is actually possible. With the right resources, tools, and strategy, you can be on your way to accumulating $1 million and beyond. In this article, we lay out 11 actionable steps you can take to become a millionaire. We’ll explain how to create a savings plan, invest wisely, and use tax-advantaged accounts to get you closer to your goal.
Without further ado, let’s get started.
1. Know your Why
The first step to becoming a millionaire is to know why it is important that you become become one. If becoming a millionaire is a dream of yours, then you should have a meaningful reason for your desire. Maybe you want to travel the world or donate the money to charities. It is also possible that you grew up in a poor family and want to break the chain of poverty.
Your why should be strong enough to a level where it becomes part of your life. That is right. You cannot become a millionaire just like that. It takes a lot of time, sacrifice, and hard work to become rich.
The reason you want to become a millionaire will give you the motivation to keep going during tough times. Your why should be strong enough that you are willing to climb mountains, work multiple jobs, and spend sleepless nights pursuing this financial goal.
Very often people want to become millionaires only to be stopped by negativity from those around them, lack of confidence, or support. Your why should be strong enough that all negative people around you will not affect you.
2. Understanding your passion is critical to becoming a millionaire
The easiest way to become a millionaire is to find a way you can monetize your passion. It is easy to succeed when you are working on something you love. Most millionaires make a lot of money by working on things their like.
Why is passion so important? I hate to break it to you but the road to that one million dollars will not be easy. You will encounter unimaginable setbacks. Some of which will come from your surroundings such as people around you pulling you down, telling you that you cannot do it, etc. Other setbacks will come from the problem you will be solving. If you are selling products on the Internet, for example, you are not going to make millions of dollars in sales in a single day. You still have to go through marketing hustle, competition, and waiting.
You will start with zero sales and hustle your way up. Your sales will not take off right away. You will spend a ton of time and money working for nothing until you find something that works. All these activities will help you reach enough people to bring in a meaningful ROI. Before that happens, you will doubt yourself, you will think about quitting, or much worse.
The only way you will push forward and lift yourself up after falling many times is by working on something you are passionate about. If you really like what you are doing, it will not matter how long it takes for you to succeed or how many times you fail.
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3. Find something you can do that aligns with your passion
Now that you know where your passion lies, it is time to figure out something you can do that aligns with your passion. For example, if you like shopping or trying new things, find something you can do in the fashion industry that will bring in money.
If there is nothing in the fashion industry, find something that is close to fashion. As long as you are willing to push through, you can always become a millionaire from doing it.
If there is nothing in the area of your interest, it could make sense to find something you care about. You must be honest with yourself in order for this to work. Find a problem people are struggling with and figure out a way to answer it. The problem must be real and there should be a need for answers. For those who want to start businesses, it would make sense to focus on solutions that will last for a very long time.
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4. Develop unbreakable habits and discipline
Now that you have found something that will take you to that one-million-dollar mark, it is time to have a habit. I really mean a big and unbreakable habit. Just because you have the right idea and the right market, it does not mean you are going to succeed without discipline.
The journey ahead of you will be like a roller coaster. When things are looking good, you will feel invincible. However, when things are not looking great, you will feel betrayed and no longer want to continue further.
You will start with a lot of motivations. However, once that motivation is gone, the only thing you will rely on is your discipline and the habits you have developed. Your discipline gives you the ability to wake up in the morning and continue to work on something even if there are no results in your sight.
Being a millionaire is not easy. More importantly, becoming a millionaire is more of the person you must become instead of the money itself. That is why you need to develop great habits and stick to them.
5. Having a plan is essential to making a million dollars
A well-prepared project is always easy to execute. Planning is everything. Every success takes some serious planning. At this point, you know how much money you need to make and what you are going to do to get there.
Your next big question is how are you going to get there? What do you need to accomplish every day, week, month, or year to achieve your goal? This is where planning comes in.
You need a winning plan that will take you there. A plan is like a road map that you are going to follow every day until you make a million dollars.
For example, if you have decided to become a millionaire by only saving, you will need to have a savings plan. This will depend on the money you are making right now, how much you have saved already, and the timeline. Assuming that you have $0 saved at the time you are starting out, let’s use this example and see how you can save a million dollars.
Your saving goal = $1,000,000
Time in effect = 15 years
Current salary = $120,000
Money to be saved in 1 year = $1,000,000/15years = $66,666.67
The money needed every month = $66,666.67/12 = $5,555.56
Money to be saved every week = $5,555.56 /4 = $1,388.89
That is a simplified saving plan for someone who wants to become a millionaire through saving without doing anything else.
In order to become a millionaire in 15 years, you need to save at least 1,388.89 every week or $5,555.56 every month. Having these calculations will tell you whether you are saving enough or need to add more. If one month you fell behind, you must catch up on the following month in order to stay ahead.
Saving alone will take longer to become a millionaire. Instead of keeping your money in a savings account, you can invest it. This will allow you to speed up the process and become a millionaire much faster.
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6. Save and budget your money strategically
Becoming a millionaire is not about one single step you take and land there. Instead, it is a combination of different financial decisions you make for a single purpose. Reaching the one million dollar milestone requires a combination of habits that must be followed by the book.
One important habit you need to start when you want to become a millionaire is your saving habit. You must learn how to save money first and spend what is left. In the end, it is not about how much money you make. Instead, it is about how much you keep. To achieve your saving goals, you need to create a budget that works and saves you money. Your budget should include exactly how much you make, your expenses, spending targets, and the difference.
Your goal is to save as much as possible. Then use the money you saved to make more money.
7. Reduce your expenses
One secret to becoming a millionaire is to keep your expenses low and keep most of the money you make. Always remember that you can always find something to do with your money once it is saved. But, you cannot achieve anything once your money is spent.
Let’s compare two different people with different incomes.
Person 1: Salary = $100,000/year, Savings = $5,000/year
Person 2: Salary = $30,000 /year, Savings= $10,000/year
Even if Person 1 is making more money than Person 2, the one making less money is saving double what the high-salaried individual is saving. For this reason, it would not hurt to conclude that Person 2 is smart at managing his/her money than Person 1. To become a millionaire, you need to understand the importance of reducing your expenses through budgeting and saving.
8. You can’t become a millionaire without failing
In order to become a millionaire, you must know by heart that failure is part of the process. As I stated at the beginning, the road to success will not be an easy one. You will fail countless times.
Failure is not a bad thing. Most people do not get this point. People think that failure translates to being incapable of achieving something.
The hard truth is that when you fail at doing something, it means you are doing something wrong. Instead of panicking and throwing rocks at some people or yourself, evaluate what you have done and see what you can do differently. This is because failure is the greatest teacher.
The process will be like this: You will try something and then fail. After failing, you will re-evaluate your strategies, correct your mistakes, and try again. Then, you fail again and correct your mistake. This process will continue until you have made all the mistakes possible. Finally, you will take off. Without failure, it could be impossible to know what you are doing wrong.
If you want to become a millionaire, treat failure as a teacher and learn from your mistakes. That is how people become successful and achieve what others think they are impossible. Everyone fails. Those who succeed are the ones who pick themselves up and try one more time.
9. Start Investing
Unless you want to become a millionaire by running your own business, you must invest your money to grow wealth. Investing is one of the greatest ways to become a millionaire. When you invest, your money goes to work for you. Although you can become a millionaire through saving and reducing your expenses, there is a limit to how much you can save. Additionally, this way of making a million dollars will take longer.
At some point, you will need a push on your journey to a million dollars. Investing money you save will propel you to the final point. There are many ways to invest money and the investment decisions you make will depend on your timeline and risk tolerance level. Whether you invest in ETFs, Index Funds, Mutual funds, stocks, real estate, or precious metals, investing will definitely help become a millionaire.
Long-term investing is always the best way to invest money. So, stick to long-term investing and watch your portfolio grow.
If you want to learn more about where you can invest your hard-earned money, read the following article.
Related: Top 10 places to invest money
10. Take advantage of tax-advantaged retirement plans
One of the fastest ways to build wealth and become a millionaire is to take advantage of your retirement saving plans. If your job allows you to contribute to your retirement plans such as 401(k)s and IRAs, contribute as much as possible.
Some of these accounts allow you to grow your savings either on a tax-deferred or tax-free basis. No matter the plan you choose, your savings will grow much faster due to your contribution, return on investment, and employer matching percentage(if any).
You should also look into Health Saving Account(HSA) to help you minimize your taxable income and put aside enough funds for your medical expenses. After reaching a certain percentage, your plan might allow you to invest some of your HSA funds which will allow you to grow your net worth and become a millionaire much faster.
11. Don’t give up
Never ever give up. No matter how hard things will get, you can still become a millionaire if you keep going. Even if you feel like the world has forgotten you, you must never quit.
There are millions of people who never achieve millionaire status simply because they give up too soon. Instead of being disciplined and pushing through hardships, they simply choose to let it go.
To become a millionaire, you must not give up so easily. You must not become like everyone else. Always remember that in order to become a millionaire, you must do what the majority of people are not doing which is not giving up. The moment you give up, your journey will be over.
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