Most of the people around us dream of becoming a millionaire some day. Some do, most don’t. There are thousand of articles, books, methods, and motivational speeches that will set you on the right direction. Most of them are inspired by people who succeeded. Then why most of us fail? I will show you how to become a millionaire, guaranteed! All you need is an average income, discipline, and patience.
Short animation that should open your eyes
Before getting to the point have a look at the video below. It emphasizes one thing and one thing only.
What did you learn from this video? Any conclusion? Let me dissect it for you.
She’s making a good point. He spent a small fortune on beer over the years. But he is also right. She didn’t spend that much money on beer and still, like him, has the same financial status. They are both right and wrong at the same time. How is that possible?
How to become a millionaire. Guaranteed! – the receipt
She is right because saving can be the key to become a millionaire. Not the only one, but the most certain one. Guaranteed! He is also right because most people don’t do that, they don’t save money. Or if they do, they spend it at the wrong moment or on the wrong things.
Let me give you the receipt about how to become a millionaire:
- Average income: if you have a low to medium income every month, you are good to go. This means you can keep a decent life standard and still put some money on the side.
- Discipline: each day you need to save some money. Yes, you read correctly – each day! This doesn’t mean you have to give up drinking beer or buying food for your dog. It means that when you get your salary, before starting to spend any penny out of it, you put some money away. YOU DON’T TOUCH THEM! NO MATTER WHAT!
- Patience: it will take years till your bank account will start to look like one of a millionaire. You will probably be in you 60’s by them. But it will happen! Guaranteed!
STOP, STOP, STOP!
Before smashing the computer and shouting that this is bulls**t let me show you a graph about how much you need to save to do your first million by the time you are 65. Then I will give you 3 reasons to do it.
Why would you spend so much time and not spend the money:
1. Is better than a 401k plan
It is similar to the 401k plan but better:
- You don’t have any deposit limit. If you earned more this year you can save more, no one will stop you;
- There is close to no risk of losing your money. 401k plans invest your money in mutual funds. This could go in your favor, or not;
- Retirement is not a condition to get the money. You can be 65 and still be working (of course how many of us would do that with 1 million in our account?);
- You are not liable to any penalties.
2. It will not impact your current life standard
Putting aside 300-400$ will not make you poor. It will probably be somewhere below 15% of your monthly income. The key is to start as young as possible so the amount that needs to be saved is minimum.
Also, discipline is very important. Let’s say you started saving in your 30’s and you are now 45. Your kid needs money for college. 193$ would not make a huge difference for him. But it already does for your account. Never ever spend the saved money on a new car, a bigger house or an expensive trip!
3. After a lifetime of work you can enjoy your retirement and live like never before
You worked for the last 40-45 years. The kids are married and have good jobs. It is time for you to enjoy your life without hoping that the government will pay for your retirement, or the economy goes bad. You worried for all that your whole life. Go see the world, invest in a risk-free business (or at least one with low risks), buy a nice care and drive around the country. You deserve it!
One last thing. The above calculation doesn’t take on account the taxes and other fees. The main idea is that saving in the long term, in a disciplined manner, can get you far in terms of financial status.
How does this sound to you? Is it the most certain method of getting that million or not? Let us know in the comment section. Thanks!
Tip: Read the following article to get a better understanding on how to manage your financials.