I’ve said this before, and I’ll say it again – anyone can become a millionaire. In fact, if a person starts young enough, they can become a millionaire by simply investing $300/month into their 401k plan. Sure, they may not reach millions until retirement time, but they will reach it nonetheless. The point is, that becoming a millionaire is not an overnight process, but with time, consistency and a workable plan, a person can reach the million-dollar wealth mark.
An actionable plan to follow and excel in can help tremendously as you map out your path to millions. What can also help is a consistent stream of income (or a few, actually). Your primary source of income can play a huge role in how you reach your first million. To leverage that income properly, you will need to make sacrifices and stay disciplined. It will all be worth it in the end! Here’s what you need to do to map out your path to millions.
#1 Affirm Your Million-Dollar Savings Goal
Write a check to yourself for $1,000,000. Type up an affirmation statement that you will become a millionaire, print it out and place it on your desk. Put together a vision board that includes true wealth. The purpose of these tasks, or any other form of affirmation you may do, is to start envisioning your life as a millionaire. You are putting it out into the universe that you are working towards and worthy of a million dollars.
There are plenty of studies that show the power of positive thinking, using affirmations, and writing out your goals. If you think you are alone with affirming the things you want, you aren’t! According to MSN, a TD Bank survey showed that 66% of millennials envision their success, compared to 43% of GenX-ers, and 18% of baby boomers. That may explain the number of wealthy millennials!
#2 Start Reducing Your Profit Margin
You may have heard of “profit margin” if you are a business owner or have taken business classes, but it can apply to a person’s situation as well. Profit margin is the amount by which revenue from sales exceeds costs of the business. Applying that to your personal situation would mean the amount by which your income exceeds your living expenses. Much like a business can have a negative profit margin, a person can also have a negative profit margin if their expenses exceed their income.
Understanding how far your income takes you is huge. Your budget should make this very clear. Your budget will tell you if you can afford all of the spending and expenses you have, with the income you make.
To plan out your path to millions, you will need to ensure your income significantly exceeds your expenses and spending. This will mean cutting back any non-necessary spending, finding ways to increase your income, and saving anything extra/left over.
You will also need to change your mindset about saving. If you think saving 5-15% of your income is going to cut it to reach the million-dollar mark, think again. Money Boss blogger J.D. Roth recommends saving 50% of your income. That may seem like an impossible feat, but it doesn’t have to be. Of course, it won’t be easy, but it can be done. The more you make and the less you spend means the more you can save.
#3 Live a Life of Frugality
Frugal living requires time and consistency. It is not a one-and-done process, it’s a lifestyle change. Living frugally means you aren’t increasing your cost of living when you get a raise or more money. It means you aren’t overindulging in things you don’t need. It means you are living within (or preferably under) your means. As more money comes your way, you aren’t spending it. You are using it to reduce your debts or grow your savings.
To live a life of frugality means you can pinpoint needs and wants, and only spend money on the needs. Not to mention, you aren’t convincing yourself that you need things you really don’t.
While a frugal person may be able to afford a nicer car or apartment, they are keeping their living costs as low as possible to save money. It takes some time to truly live below your means, so start by staying within the limits of your budget. Once you’ve mastered that, start cutting back additional purchases or services you don’t need to save money. Check out 9 Frugal Habits to Implement Now.
#4 Ask for a Raise
If you can make more money for the job you are currently doing, you can get ahead faster. If more money means taking on more responsibility, think about the greater good. Getting an increase in pay, without increasing your cost of living, quickly translates into more money that can be saved towards your millionaire status. Read 5 Tips to Negotiate Salary for some pointers to follow when asking for your next pay increase.
What if you ask for a raise and your employer says no? Look for another job, or another stream of income. You certainly do not have to become a victim of your circumstance. Fight through it and find another way. There are plenty of things you can do to earn more money and help you on your path to saving a million dollars.
#5 Start Investing
The earlier you start investing, the more you will have when it’s time to tap into that money. The reason for this is compounding growth. Your investments earn money on top of the earnings it makes. You can double, triple, or exponentially increase the amount of your money by investing it over time. There are plenty of low-cost options available to help you invest over time.
Your goal should be to work up to investing the 50% of your saved income. First, you need to get to the 50% savings mark. Also, you will want to ensure you are debt free and have an emergency fund before you start investing.
Because the goal of investing is to keep it tied up for a long period of time, which results in more growth, you should think of that money as easy to get to. That money should be invested solely to help you reach your wealth goals.
#6 Remember, Your 401k is an Investment
If step #5 is too daunting or overwhelming to think about, focus your efforts on your 401k plan (or an IRA if your employer doesn’t offer a 401k). Investing in your 401k for retirement is essentially the same as investing long-term. There are a just a few additional ramifications and requirements for retirement investing. However, it functions the same as investing in something else long-term: You contribute to it regularly, don’t touch it, and let it grow for decades.
#7 Change Your Circle of Influence
One of Jim Rohn’s most popular quotes is: “You are the average of the five people you spend the most time with.” If you are spending all of your time with friends who can’t afford to pay their bills, who spend frivolously on things they don’t need, or who don’t want to better themselves, then you are likely in a similar boat.
If you want to shift your focus and lifestyle to a future millionaire’s path, you need to surround yourself with people who have a similar mindset.
Attend networking events, link up with mentors or old acquaintances who have made something of themselves, start reading more books written by millionaires. You are going to have to switch things up to ensure you are surrounded by things that will help you get to where you are going.
#8: Stay Consistent and Be Patient
Becoming a millionaire does not happen overnight. Unless you win the lottery, it will take years before getting anywhere near your million-dollar goal. And you know what? That’s perfectly fine. As long as you are patient but disciplined, consistent and focused, you will reach the goal you set for yourself.
Don’t be afraid to try new things that can help you get to your goal faster. Start a business, invest in real estate, take classes, and find a coach. Sometimes, it takes money to make money – that’s what investing is, right?
Related: What You Need to Save to Become a Millionaire
You can have it all! You can build true wealth over time! You can live the life of your dreams. The steps listed above can and will help you get there – as long as you’re willing to put in the work. Are you willing to put in the work? What steps are you currently taking to become wealthy? Share your thoughts, tips, experiences, and questions with me and other CGS readers by posting a comment below!
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Good Morning Beauties! @clarissaanne @amandayork @epennock @kbrianne @ktrinkle @awyand9 @gretacaffrey @laurielou42 @eleanoremann @cmliddle @rvlry @cbnowlan Check out the new article on the blog called “Mapping Your Path to Millions”. You won’t be disappointed!