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How To Become A Millionaire

Mar 20th, 2007 by Wealth Builder [This post is written and copyrighted by Wealth Building Lessons (http://www.wealthbuildinglessons.com).]

As mentioned in earlier posts on compound interest and paying yourself first, saving small amounts regularly over an extended period of time is a sure shot way of becoming a millionaire. But you can do more to achieve that goal quicker. The best way to create wealth and become a millionaire is by learning what millionaires do and copying them. So once you know how millionaires acquired their wealth, how they live, and how their families function, all you have to do is replicate that system and now you’re living like a millionaire!

A really good book on the subject is The Millionaire Next Door. The book has some excellent points.

80% of America’s millionaires are first-generation rich.No whining about how tough your life is, how busy you are or how poor your family was growing up.
Millionaires live frugally.That doesn’t mean they’re cheap. They just live below their means. They live in modest houses and 57% buy American cars. 36% buy used cars. So don’t buy crap!
Most millionaires have their own businesses. Self-employed people are four times more likely to be millionaires than those who are employees. These can be regular small businesses. Not everyone owns a Fortune 500 company! Like a wealthy friend of mine used to say, “Be your own bitch!”.
They manage their assets well. Most of them didn’t get rich by having high incomes. But they did put aside a small amount regularly and invest it. They are also proactive in their investments. They study them and invest in thing that they understand and know a lot about. Learn about finance and how it works.
Millionaires value education. They pay for their kids education and encourage them into high paying professions like medicine, law, dentistry and accounting. No $125,000 degrees in Sociology!
Many of them are immigrants who didn’t get sucked into the American consumer lifestyle trap. Its not possible to become wealthy if you’re caught up in the typical consumer lifestyle. So again, stop buying crap!

Becoming wealthy takes hard work and sacrifice. If you’re thinking you’ll get lucky and get rich quick, the odds are very much against you. Even most lotto winners are worse off after 5 years than they were before they won.

And we end with a joke.
How do you make a million dollars in the stock market?
You start with 2 million!

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9 Responses to “How To Become A Millionaire”

on 21 Mar 2007 at 8:17 am1Moneymonk

I agree with all points, especially the last one. I personally know people that are very capable of becoming a millionaire only problem they had was a spending/lifestyle problem.

Both are making 6 figures a year, but spending money on useless stuff with the right investments and a little disciple they could have easily became millionaires within 4-5 yrs. The problem, they love Mercedes Benz so much that they both lease one every three years. Two mercedes-=2 very high car notes. Both do not invest or save money!

They could have easily bought 2 quality used cars and had it paid off already.
on 23 Mar 2007 at 1:59 pm2Wealth Journey

Great post. Sometimes you have to remember that if your goal is to simply become a millionaire, then ya, don’t get buy anything, but if you are simplying trying to build your wealth and enjoy life, spending money for personal enjoyment isn’t a bad thing to do every now and then.

I know some immigrants who consider themselves poor or don’t have a lot of money but in comparison to the avg person, they are probably above avg as far as assets and income. These same people are afraid to really enjoy life. There has to be a balance between saving and enjoyment of life.
on 23 Mar 2007 at 2:04 pm3Wealth Builder

Excellent point WJ.

i think the middle point is to experience some discomfort up front and then enjoy yourself in your middle age.

I have a friend who bought a $100,000 car at age 30 rationalizing that if i dont enjoy it now, when will I enjoy it. I don’t think a 30 yr needs a 100k car. Building your wealth up is more important and a $40k car would’ve sufficied!
on 26 Mar 2007 at 10:58 am4Personal finance at KMull.com

[…] How to become a millionaire at WealthBuildingLessons — simple, solid advice […]
on 03 Apr 2007 at 9:39 am5Puleen

Agree whole heartedly with all the points that were made in this article. Just by observing some of the people, their personality, interactions and other characteristics, puts a whole new look on who these people really are.

Good read!

Cheers!
on 11 May 2007 at 2:09 pm6Money

Not everyone owns a Fortune 500 company! Like a wealthy friend of mine used to say, “Be your own bitch!”.

That was a very funny one .. I sure had to laugh.
Overall, a very good post.
on 11 Sep 2007 at 11:22 pm7Wealth Building Lessons » Blog Archive » Freeman or Sharecropper?

[…] The fact that 70% of Americans are living paycheck to paycheck is terrible. It means that a job loss, a medical emergency, or even a car breaking down can seriously impact someone’s ability to stay solvent. If you’re in this kind of situation, you may find yourself in a never ending circle of debt. You use each paycheck to pay off pressing bills and since you have nothing left over for savings, you accumulate more debt by the time the next pay period comes around. As a result, you’re barely keeping your head above water and aren’t saving enough for emergencies, retirement or for wealth building strategies. […]
on 26 Oct 2007 at 7:01 pm8EnoughWealth

Good Post. I agree with most it - the only reservation I have is the bit about running you own business. Although business owners may be 4x as likely to become a millionaire as employees are, the successfull self-employed tend to be focussed, organised and hard-working - so they’d probably become millionaires as employees also…

I “made” a million as an employee, just by living a comfortable but not extravagent lifestyle, saving as much as possible, and investing as close to the efficient frontier as possible. Although I’ve dabbled with some side-businesses as a hobby, I’m not really entrepreneurial material.

Most small businesses go broke within the first five years, so this is NOT the road to wealth for most people. If people think that it is easier to make a million by starting a business than by being an employee I think that they’re kidding themselves. Either route can lead to wealth, choose the one that best suits your personality, skills and interests - not the one that appears to be a “shortcut”.

Regards
http://enoughwealth.com
on 10 May 2009 at 7:36 pm9Brandon

Millionaires value education. They pay for their kids education and encourage them into high paying professions like medicine, law, dentistry and accounting. No $125,000 degrees in Sociology!

Really? Wealth isn’t the pursuit of a job you hate just to acquire money. There’s more to being rich than that. In fact, I know very few millionaires, wealthy individuals, or normal folks who try to “push” their children into certain professions just for money. Allow your children to pursue their interests. If that is sociology, then more power to them!

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