Becoming a millionaire may seem out of your reach, but it's possible with the right attitude and guidance. The fact of the matter is your income can only grow as quickly as you do, so you need to change your mindset to achieve your goal of becoming a millionaire.
Once you have a millionaire mind, you can't lose it, no matter what financial or business mistakes you make along the way. To get yourself there, you're going to need some structure. To help you, I've outlined the top 10 tips you should follow to become a millionaire this year.
1. Evaluate your current financial status
You can't grow if you don't know where you currently stand, so it's time for you to put everything on paper. By physically seeing where you stand, you can make the appropriate changes to achieve your financial goals. You need to be clear about the amount your earn versus the amount you spend and create a financial plan that will help guide your next steps.
If creating this plan has made you realize you aren't satisfied with both your income and your spending habits, don't get discouraged. This is a step towards making positive changes. When creating your future plan, you need to:
- Know your full income
- Establish how much you spend
- Be clear about where you could save
- Use an online invoicing tool like sighted.com to track your finances.
- Write down your financial and lifestyle goals
2. Work on increasing your current income
Once you've created your plan and listed your financial and lifestyle goals, it's time to work out how you are going to achieve them. Realistically, you aren't going to become a millionaire by cutting back on your daily coffee; you need to work out how you are going to grow your current income.
Firstly, look at opportunities with your current employer. Maybe there is a promotion up for grabs or a new position within your company that would suit you better while offering you a higher income. Secondly, consider a side hustle that will allow you to regularly generate more money. Lots people use my tool Chattypeople to make chatbots on the side.
3. Think about new revenue streams
Millionaires rarely have only one form of revenue. In fact, many of them have more than two. Start small and find a side job that can generate more money for you on a monthly basis. Some options could be:
- Offering your expertise as a freelance consultant
- Mentoring or teaching
- Doing guest lectures or blog posts
- Working a second job part-time
- Renting the spare room in your home
- Opening an online store
4. Get saving
Once you've got your income on track, you need to create a strategy whereby your income is split between your:
- Living costs (bills, rent, mortgage, grocery shopping etc.)
- Personal expenses (cinema, dinners out, holidays, etc.)
Your savings will be split into two accounts, these are your:
- Retirement savings plan (401(k), Roth, IRA)
- Emergency savings plan (personal savings account, money market)
The best way to organize your finances is to automate them. Once you have established how much you are going to be saving, create direct debits from your current account to these two savings accounts.
Schedule your direct debits to leave your current account on the day you get paid to avoid any temptation of spending. Depending on how much you earn, you want to aim to put 5 percent towards your emergency fund and 10 percent towards your retirement fund.
5. Start learning new skills
Learning is about more than enabling you to do your current job properly; it's a way for you to become an expert in your chosen field. Additionally, it's a way for you to discuss topics with other professionals more broadly. Further, it will allow you to become a well-rounded intellectual.
You don't have to reapply to go to college to learn new skills. You could simply:
- Read more
- Listen to podcasts
- Attend events and conferences
- Do an online course
6. Seek opportunities
Opportunities aren't just going to land on your lap as you sit at your desk during your usual nine to five routine. You have to go out there and get them. You also have to make your name heard so that others think of you as the perfect person when jobs pop up.
If you've got a business idea you've been sitting on for a long time because you have to keep your day job to pay the bills, invest your spare time developing it until it starts generating a side income for you. Once it's up and running, it could even become your million-dollar baby.
7. Become more frugal
Rich people don't get their fortune from giving it away and buying fancy cars, at least not in their beginnings. If you want to become a millionaire, you need to start living a more frugal lifestyle. You need to cut down on your spending by avoiding branded products and lavish shopping days. You can also:
- Start using coupons
- Look out for freebies
- Buy your supermarket's own brand products
- Start using public transport instead of your car or a taxi service
- Cut down on restaurants and cook for your loved ones instead
8. Avoid debt
The best way to become a millionaire is to avoid debt at all costs. A mortgage is an investment into yourself and potentially your family. A credit card bill, on the other hand, is an expenditure you have made without considering whether or not you could pay it back in the first place.
Start by treating your credit card as a way out of an emergency rather than a luxury. To get into the right habits, avoid taking it shopping with you and take it off any online shopping accounts you may have. This method will also make you think twice about buying things you simply don't need.
9. Embrace nothingness
Being bored is fine. In fact, being bored actually means that you have spare time on your hands, which is a good thing. Aside from stopping you from filling every void with an activity that costs you money, it's also a great way to focus your efforts on more productive matters.
When you are bored with nothing to do, you could:
- Start meditating to enhance your concentration and clear your mind
- Read a book
- Cook a nice meal at home
The phrase "it's not what you know, but who you know" couldn't be truer. You'll often find that successful people associate with equally as successful peers, whether or not they are in the same field. As a result, it is key that you start networking with people that have the way with which to catapult you to success.
Unfortunately, even if you are the best brain surgeon in the world, nobody will know it unless you tell them, so find out where your industry icons will be, and go and meet them. There are a number of ways you can meet successful people, some of which include:
- Sending a simple email
- Using social media to contact them
- Meeting them at events and conferences
- Subscribing to their newsletter
- Attending their webinars
- Read great finance blogs like Jeff Rose, CFP, Good Financial Cents.
You can't become a millionaire by sitting in the same chair every day until retirement. You need to change your mindset and implement some, if not all, the tips outlined above. Start your day with a new sense of drive, discipline, and make the necessary sacrifices to reach the milestones that will propel you towards your goals.
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This article originally appeared on Entrepreneur.com. Minor edits have been done by the Entrepreneur.com.ph editors.