Be A Millionaire – How To Become A Millionaire?

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In this blog post, I want to share with you the secret of becoming a self-made millionaire. We will discuss how to build wealth without inherited money or winning the lottery.

how to become a self-made millionaire

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There is a great book called The Millionaire Next Door: The Surprising Secrets of America’s Wealthy that I have read not long ago. This book gave me the motivation to write this blog post. I highly recommend reading this book as it’s changed my mindset so much.

Step #1 Of Becoming A Millionaire – Create A Budget

The first step is to create a budget plan for your household.

If you’ve read any financial book or listened to financial experts’ advice, then you may hear about the number 1 secret of becoming a millionaire: invest 10-15% of your income right after you’ve received your paycheck. It’s important to pay yourself first. Otherwise, if you invest the money left at the end of the month, you may spend your money on unnecessary things, instead of building your wealth.

Then you left with 85-90% of your income. This is what you need to distribute for housing, food, and other expenses.

Again, I highly recommend reading the book, The Millionaire Next Door as it will tell you that one of the main secrets of America’s wealthy is living below their means.

Of course, it requires sacrifice, but it’s your choice which one is more important to you: building wealth or living comfortably and spending more money.

In this book, I’ve read that most of the wealthy people in America live a frugal lifestyle to be able to save more and invest what they saved.

Living frugally

You may ask how is it possible to save 10-15% of your income and cover your expenses with 85-90% of your income? The answer is simple. Think about people who earn less than you. What did they do? Do they live in a cheaper neighborhood? Drive less expensive cars? Own less stuff?

If your answer is yes to any of these questions, then consider selling your house, your cars or unnecessary stuff, and buy less expensive alternatives. Maybe a smaller home in a less expensive neighborhood is just as fine as the current one. Or maybe you don’t need to own so many clothes. Think about it.

It can be a good idea to find a friend or a family member, who earn less than you and ask them how do they cover their expenses. Do they have a gym membership, or they just jogging in the street, or spend money on junk food, or drink coffee at home or buy one at an expensive cafe? Study their spending habits and create your budget plan with less income.

#1 Secret Of Becoming A Millionaire – Invest The Money You Save

One blog post isn’t enough to write about the importance of investing. That’s why I recommend reading the book, The Richest Man in Babylon by George Clason.

Investing is the foundation of being wealthy. Wealth is not a matter of income. There are a lot of people, who have high-income jobs, but they have a negative balance. Wealth is a matter of expenditures. The less your expenses are, the more you can save, and the more you can invest to grow your wealth.

But what if you can’t lower your expenses? Start to think about the possibilities to earn more. Let’s find a second or a third job, start a side-business, or find a way to make money with your hobbies. The key is to save as much as possible.

It’s hard at the beginning, so figure out your why. Why do you want to be wealthy? Would you like to retire? Live financially free? Quit your job? What’s your goal?

For me, it’s building a passive income to be able to travel the world and spend more time with my family. It’s really important to know your goal. I always remember my goals, when I create my budget plan. That way, it’s so much easier to save more if I know why am I doing this.

The next step is to create your investing plan. As I mentioned, I want to build passive income sources. That’s why I mainly invest in dividend-paying stocks and real estate that I rent out. That way, I can earn money even if I don’t have a 9-5 job, which allows me to travel the world and spend more time with my family.

Financial Education

Finally, my last tip is to educate yourself financially. Unfortunately, we don’t get any financial education at school. That is the reason most of the people spend all of their income or even more and live in debt.

For example, I always start a day by reading a few minutes. I get up a bit earlier just to make sure to have time to learn. These books are usually personal finance or self-help related books. These are my main focus right now in my life, so I make sure to improve myself to achieve my goals.

If you want to change your finances, then start by taking action based on this blog post and also start to educate yourself. The two books mentioned above can be a good start: The Millionaire Next Door and The Richest Man in Babylon.

To sum up, the main secret of becoming wealthy is to save as much as possible and invest this money into investments that align with your goals. It could be stocks, bonds, real estate, or your education. The key is to take action, or nothing will change.

To save (more) money, you either have to lower your expenses or increase your income. However, the minimum is 10-15% of your income that should go to some kind of investment right after you’ve received your paycheck.

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