How to become a millionaire
Becoming a millionaire still has “glitz” and “glamor”. If you are determined enough the question will not be if you will become a millionaire but when.
Having a net worth of at least 1 million dollars is very impressive, but it is not anything “out of this world” these days. An average salary is around 50,000 dollars a year, that is just 20 years of earnings. When you consider that investing in the stock market, or real estate usually yields between 7-10% over long stretches of time it is easy to see how attainable becoming a millionaire is.
The first step to becoming a millionaire, or reaching any significant financial goal for that matter is to go over your own financial numbers. How much money to you take home [after taxes] a month? How much to you spend a month and where does the money go? Then you need to see the least amount of money you could spend monthly and still maintain your lifestyle. You may spend 2800 dollars a month, but spending 2200 dollars a month is a huge difference financially and will not require too many sacrifices, you will just need to save 20 dollars a day.
The next step is the toughest step, this is where most fail. You need to save as much money as you possibly can. A general rule of thumb is to save around 20% of your take home income but if you can save more than that is just the icing on the cake. You can live without spending 4 dollars for a cup of coffee three times a week. You can live without paying 400 dollars a month for a brand new car. You can live without a new 50 inch television. It is not easy and it is not always fun to not “keep up with the Jones’s”, but in the end, it will be worthwhile.
Once you begin saving and you have a net surplus in your monthly budget you need to determine what to do with your leftover money. If you have any credit card debt you will want to get it paid off immediately. If you are debt free, except for your mortgage of course, then you have a lot more options. You should consider investing in the stock market and/or real estate. If you want to learn more about the stock market, check out the articles I have written here on my site.
Compound interest is an amazing thing. An 8% return on 100,000 dollars will yield you 8,000 dollars a year without you even lifting a finger, passive income! Then the next year you will be getting an 8% return on 108,000 dollars, which means your money will multiply quickly if you stay determined to reach your financial goal of becoming a millionaire.