How to Make Millions Fast
In part I of How to Make Millions, I focused mainly on the three courses of action I think you need to start with on your journey to true wealth. These are three steps - Learn, Plan and Execute. I also shared with you some of my favorite books on investing and building wealth, showed you how you can set up your own personal plan, and how you might ultimately go about executing that plan.
Please read that first part of this guide if you haven't done so already. While I think that post was a decent start to the series, we certainly have a lot more to go over! Without further ado, here are some of my favorite tips on how to make millions:
The "Secrets" I've Learned on Wealth-Building
- Focus on building your NET WORTH, not your INCOME. When we say someone is Credit: Google.comwealthy, we are not really saying that they make a lot of money per year. What we are saying is that they are worth a lot of money (they own many assets minus liabilites). True wealth is derived from assets, not a job or liabilities such as a car or big house). If you own a lot of income-producing assets that produce passive income such as dividend stocks and investment real estate, enough so you do not have to work a job, and enough so that your monthly expenses are covered and then some, then you are truly wealthy.
- More in, less out. That is the formula. You can either make more money, or cut your expenses - either way, the bottom line is you need to have more money for investing in assets. It doesn't matter how much money you make per year if you blow all your money on liabilities and "stuff"! It's what you do with the money that matters. You could be a doctor that makes $400,000 a year and STILL have a negative net worth - that is very possible. It's stupid, but possible. Or you can be someone who makes $35-40k a year but has a net worth of close to a million! That is ALSO possible. Check out the book A Million Bucks by 30 If you don't believe me.
- You must invest. (That is unless you start a business of some sort - you can get rich that way as well). Learn how to invest in stocks, options, warrants, etc. Study the markets, but have fun with it as well. In my opinion, the number one easiest and most likely path to wealth is investing in REAL ESTATE. Cash-flowing multi-family homes and apartment buildings are Credit: http://districtreia.com/real-estate-investing/real-estate-investing-financing-the-deal/great because you are building wealth in three ways - 1) equity buildup (tenants pay mortgage). 2) Cash Flow (rent minus all expenses) 3) AssetAppreciation. Number two would be investing in STOCKS, and number three STARTING YOUR OWN BUSINESS. "There are a million ways to make a million." Choose yours. This is just my opinion. You could obviously choose all three paths if you know what you're doing.
- Don't give up - "it's a marathon, not a race." Don't believe what the media tells you about Credit: http://renewaldynamics.com/2010/09/04/musings-on-my-lottery-ticket/money. The media makes you think that everything is quick and fast and easy! * It's not easy, and it may take some time. The lottery, and casinos, are for the ignorant - Remember that. Turn off the CNBC, the radio, and the television altogether - the only good financial advice and knowledge you will receive is either from reading good books on money or from people who are professionals.
- The difference between being rich and being wealthy is HUGE and if you understand what they are, you are well on your way. *Wealth = knowledge* There is a reason people who hit the lottery end of broke in 2 years - they STILL HAVE POOR MINDS when it comes to money.
- You must obsess a little over your financials. Have a little Financial OCD. Every dollar is an investment. Every dollar you spend today is can be worth $10 in the near future. Think that way. Invest wisely and be a little frugal - not cheap, though. Like "wealthy and rich," those two words - cheap and frugal - also have two different meanings, which I will discuss in a future post.
- Do it and want it for the right reasons. If you're doing this because you Credit: WPClipArt.comwant to live in a mansion and drive 5-6 Ferraris you most likely will fail... or succeed and then lose your money, anyway. You must enjoy the sport of investing and you must have legitimate reasons for wanting to carry out this huge goal. Maybe you love to travel and want to do that 24/7, or maybe you just want to get out of debt. Those are great motivations if you know they will make you happy. But chasing "stuff" like houses and cars will most likely not make you happy in the long run.
- Keep learning, keep growing, and stay strong. Read a different book every month or week on investing.
I hope you enjoyed these tips on wealth creation, in part II of How to Make Millions. I truly believe that anyone can become wealthy, regardless of your race, ethnicity, background, income, etc. It just takes knowledge and persistence!