To be a millionaire you have to make sacrifices, take some risks, think long-term and be responsible with your money, among other tips.
The dream and goal of many people are to become a millionaire one day, but of course, it is not something that everyone can achieve. In fact, only around 50 million people in the world can be considered millionaires.
It requires patience, knowledge, strategy, work, luck, and various factors. It involves a plan aimed at increasing income, controlling expenses and making investments, and also daring to give up many things to exceed a million.
To be a wealthy person it is also important to have help and advice from people who are financial experts and have become millionaires.
This is the case of Stacy Johnson, founder of Money Talks News (a media on personal finance and consumption) and who has worked for a decade for several Wall Street firms.
These are his tricks to become a millionaire, following these 10 simple steps:
1. Never spend more than you make
Stacy Johnson begins her tricks to becoming a millionaire with a simple and easy-to-follow recommendation: Don’t spend more than you earn. This is what he has been doing since he made his first dollar when he was 10 years old: set aside some money at the end of the month.
Of course, at some point in life there may come a situation where it is impossible to do so, he admits. But always following this rule, except for those few exceptions, brings you closer to the goal of being a millionaire.
“In general, getting richer each month is as simple as spending less than you earn,” he says.
2. Run away from debt
“Debt is not complicated. Paying money to temporarily use other people’s money makes you poorer. Charging money to allow other people to use yours temporarily makes you richer,” he sums up.
There are only two cases in which this financial expert considers it acceptable to go for a loan and pay interest: when it is necessary to survive, and when you will earn more money with what you have financed than with what you have paid to finance it.
3. Buy and sell when no one else does
When it comes to making investment movements, do not get carried away by the fear of others to sell, or by the general optimism to buy.
“You get rich investing when no one else will”, that is, in negative cycles of the economy, caused by high unemployment or a decline in the market, he explains. You have to buy when all investors are scared and sell when they think it is impossible to lose money.
It’s the same key that billionaire investor Warren Buffet follows: “Be afraid when others are greedy and greedy when others are afraid.”
4. Choose between being rich or looking like it
Investing your money in luxuries you can hardly afford like the best cars, houses, clothes and travel only makes you look rich, but it will prevent you from getting rich, warns Stacy Johnson.
People who really are millionaires usually don’t pretend it because they don’t need it, he says.
5. Live like you’re going to die tomorrow… but invest like you’re going to live forever
Get the most out of life and enjoy it as if every day was your last. But since it probably isn’t, think long-term when it comes to investing and saving.
6. There are 6 ways to be a millionaire, but you have more chances with one of them
The only ways to be a millionaire are as follows, according to Johnson:
- Marry money
- Inherit money
- Exploit a unique talent
- Have incredible luck
- Owning or leading a successful business
- Spend less than you earn and invest your savings for long periods of time.
What is the one that gives you the best chance of becoming a millionaire? Indeed, the last.
7. The risky thing is not to take any risk
The rewards in life often come hand in hand with risks, he says. In the case of money, too. That means making daring investments, like things that can go down in value: stocks, real estate, or your own business.
“The riskiest investments usually offer the possibility of obtaining higher returns. And that additional return can make a big difference in the size of your savings”, explains the expert.
Of course, it is about taking measured and informed risks, diversifying your money and learning from your own mistakes and others.
8. Your money is your responsibility
And no one else’s. You can and should ask for help and advice, but as long as you are in control of the situation, and you know and understand each step and movement made.
Virtually anyone can learn about finances, he reassures; But if you decide not to take full responsibility for your money, at least save it in the bank before entrusting it all to someone else and risking losing it all.
9. Less information can sometimes be better
Being well informed does not mean following every financial news at all times throughout your life.
“If I had been watching financial news every day and reacting to experts and market turns, I would have sold all [of its Apple stock ] a long time ago and be banging my head against the wall,” Johnson recalls.
The fellow author and Emmy winner invested $ 2,000 15 years ago, and now his Apple shares are valued at $ 500,000, despite having sold some along the way.
“If you want to be rich, buy high-quality stocks and hold them for long periods of time,” he advises.
10. Money is time
Yes, in that order. Time is the most important non-renewable resource you have, and you have to make the most of it by doing what you love.
Money, for its part, is the means that will allow you to do that, and you have to choose between buying luxuries today or having time to enjoy tomorrow, he concludes. “Those who choose the latter tend to get rich,” he says.
And he exemplifies it with this assumption: if instead of spending $200 on luxurious clothes you invest them, if you had earned 12% compounded annually on that amount, you would have accumulated about $6,000 after 30 years. Which may mean, for example, bringing retirement several months early. Is that purchase worth it? Business Insider said.
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