How to become a Millionaire – the Complete Guide
Many people dream about having millions in their bank account, but only a few make it a reality. If you want to learn how to become a millionaire, you have come to the right place.
A study of successful millionaires reveals a constant theme which repeats itself. Millionaires are made through one or more of three very simple methods. You can start a business and make your millions, invest your way to become a millionaire, or do a hybrid of the two. Anyone who tells you otherwise has no idea what they are talking about. Yes, there is the odd chance of inheriting millions or winning the lottery but let us look at something more realistic and more achievable.
Wondering why you should believe a word of what I say? The answer is pretty simple. I am a self-made millionaire and this article is a collection of the things I have done. I am living proof that using these methods, you can become a millionaire, too.
Millionaire Mindset – The First Challenge to Overcome
The biggest problem that most of us face is not the lack of ideas or the knowledge. It is the lack of the will to follow through and the heart to never quit no matter how hard it gets. I call this the millionaire mindset – the absolute ability to do whatever it takes till you reach the goal.
The fact of the matter is, everyone wants to make millions but 99% stop even before starting once they realize the amount of hard work, dedication, focus, and persistence that is needed to become the person you want to become. If you are one of the very few who always asks, “how do I become a millionaire?” and if you are ready to overcome whatever obstacles get in your way, 50% of the challenge has been overcome.
Answering The Most Important Question
Yes, I get it. You want to be a millionaire. Everyone does. But have you thought why 99% of people fail in doing whatever it takes to become one? Why is it that only some people have the ability to take massive action, put in the sleepless nights and never give up? What is the difference? It is not that they have special abilities or were gifted. So what is their secret? Most Self Made Millionaires know the answer to the holy grail – “The Why.”
Let me explain this a bit in detail.
The answer to the question why you want to be a millionaire is the most important part of the Millionaire Mindset. It is knowing why you want to make it. It is the “why” that will ensure you do not quit no matter how hard it gets. Becoming a millionaire is not something that is going to happen overnight or in a month or a year. You need to commit and follow through for as long as it takes. This can only be done if you know why you want it. If you want it as bad as you want to breathe, then you will make it.
Ability to Look at Failure as a Result, Not as the End
Most of the millionaires are entrepreneurs as they are the ones taking risks in their life. If you are brave enough to start your own business, be brave enough to accept the fact that there is a possibility of failure. If you fail, re-analyze, re-create and go back. Do not quit. The success of your business depends on the way you make it.
It is easy to make excuses to hold back from anything that you are not interested in. But you have to realize that every excuse should have a solution. Therefore, you want to find a way or a solution to set aside your excuses. Overcoming excuses are not very simple. The first step to overcome excuses is to identify your excuses and find suitable solutions to overcome them. A tight time schedule along with a strong work ethic will definitely produce the targeted results.
Here is How To Become A Millionaire
There are only three methods by which most millionaires are made.
- Starting your own Business
- Developing Passive Income and Income-Producing Assets
- Hybrid of running a successful business and building passive income simultaneously.
In the next few sections, we will learn how to become a millionaire by starting your own business, by developing passive income and by creating your own hybrid way to do both these things.
Method #1: How to Start Your Own Business
The factor at the crux of the difference between a regular 9-5 job and a business is growth. An employee’s growth in a business is linear whereas the growth of a business owner is exponential. To truly unlock such exponential growth, every business owner has to start from a position of independence and self-sustenance. But doing so is not as simple as walking into a pre-existing business infrastructure.
Starting a business pins you at the top of the hierarchy and bestows the creation of the entire system from scratch on your shoulder. To manage the complexity of this task, you must understand the key departments required to make a business work. Here are some solid recommendations to help you start a business.
Website Hosting and Website Design
Online presence is mandatory in the internet age. There are two steps to the process of building yourself a powerful online presence. The first step is to find reliable and excellent-quality hosting for your website. Do yourself a favour and invest in an established and renowned hosting provider. It may look like a big investment when you are short on cash, but if your vision is to become a millionaire, you will need hosting that can handle traffic worth a million dollars. After conducting some thorough market research, we have concluded that Kinsta can provide exactly that. Kinsta is one of the rare hosting services that uses Google Cloud Platform as their base, enabling it to provide you with a highly secure and speed-obsessed website. Kinsta also provides enhanced support along with a highly user-friendly and powerful experience.
The next step to creating your online presence is to create a website with drool-worthy design and seamless functionality. Choosing the perfect theme is key in cutting down development time and setting up a solid framework. You can find a rich gallery of custom WordPress themes on ProteusThemes. They offer a multitude of beautiful designs with clean, simple, and UX-friendly templates catering to niche functionalities with 40+ unique widgets. They also hone their themes for quick loading speed and do local SEO optimisation.
Legal and Insurance
As the owner of a business, it’s up to you to ensure compliance with all existing laws so that your business doesn’t run into trouble later. However, the legal framework within which you have to operate can be rather complicated. To save time and ensure that you get everything right, it’s best not to try doing all the compliance work yourself.
Don’t dismiss the importance of expert advice on legal matters, especially if you’re looking to become a millionaire in five years. You will personally need to focus on various aspects of the business, so it makes sense to get help from Incorporate to do this grunt work for you.
However, there are times when you may run into legal brick walls that you can easily dismantle on your own. In such situations, Nolo is the best tool to help you get through. Nolo gives you access to its extensive legal encyclopedia filled with information to answer everyday legal and business questions. It is a simple and trusted legal help platform with a range of DIY articles. If you need something beyond what Nolo already provides, it can also match you with local attorneys in the US.
If you are in a region with complicated privacy and security laws such as the GDPR, IT Governance is the expert you need. They are a leading provider of cyber risk and privacy management solutions in the UK. They also hold expertise in helping organisations successfully prepare for the ISO 27001 (information security standard) certification. So far, they have helped over 600 organisations in doing so.
Securing your business can also take the form of insurance. Protecting your business and planning for the unexpected can ensure that the growth of your business is never stunted. Sorting out your insurance is an essential step to secure yourself against the uncertainty of starting a new business. To apply for fast and affordable coverage, check out Hiscox, America’s leading small business insurer. They provide coverage for defending and safeguarding small businesses, keeping in mind their priorities and budgets.
Accounting and Finance
Money is the blood supply of a company. Companies like Kapitus Business Financing and Main Street Finance Group provide a large variety of funding solutions that can help get your business going.
Once the initial financing is taken care of and your business operations begin to grow, there will be a whole bunch of accounting and tax work to do internally. Having a strong hold on the management of your accounts and finances allows you to use your funds optimally. For a small-scale business, software like QuickBooks Canada can do wonders. For growing and larger-scale businesses, software like FINSYNC can handle all financial needs.
Services like NorthOne Business Banking can cater to all your banking needs under one roof. To add flair to your transactions, check out the products offered by Deluxe Business Products.
Finally, you need to keep track of your business credit score at all times. This is the financial face of your business. Try to make it look green and happy at all times. You can use My Business Profile to monitor and track your score as well as to understand what’s affecting it and how you can improve it.
To run a successful business, you will need a strong HR department. From ensuring legal compliance to facilitating optimum employee productivity, HR will prove to be the backbone of your business.
One of the key functions of the HR department is recruitment. They determine the new energy and mindsets that enter the ecosystem of your company. To ensure that the supply of employees entering your system is healthy, a pre-employment screening process is essential. You can outsource your pre-employment screening process to TransUnion ShareAble For Hires and get results within minutes.
The personnel of a business or organization is regarded as a significant asset in terms of skills and abilities. Managing the entire payroll for them can be a daunting task with high pushback on errors. OnPay is an online Payroll management tool to help you manage at one place. It comes packed with payroll management and HR tools to make monitoring, tracking and administration of all resources a breeze.
If you’re running your business in the US, you will need to set up 401(k) accounts for all your employees. Human Interest is a great way to help you manage these accounts easily.
This is one of the most important departments in terms of business and brand growth. It is the final item on this list because it takes the lion’s share of any business owners’ time and attention. One of the most effective methods of marketing in today’s world is digital marketing.
Over the years, the digital space has evolved greatly and a myriad of marketing approaches have come into existence. Here, we will take you through some of the most widely-used marketing strategies and show you how you can implement them yourself.
The main objective of most marketing operations is to generate leads that the sales teams can then follow up on. Creating super-effective landing pages is one of the best ways to do this. LeadPages helps you create impactful landing pages that are very effective at capturing leads. LeadPages also connects to your email account, CRM, and more to help optimise the way you process your leads.
Another way to effectively capture leads is to create chat bots. A service like ManyChat helps you create great chat bots that generate quality leads.
Once you’ve got leads, it is important to follow up and give them consistent updates about your company. The most effective way to do this is through email marketing. Landing in the inbox of potential customers with an appealing offer is an incredible marketing channel. AWeber and GetResponse both offer some incredibly powerful email marketing solutions.
If you need a more comprehensive toolkit which encompasses many of these strategies in one place, you can check out Keap. It is a CRM, sales and marketing tool to help you automate various marketing strategies. Keap can help you save a lot of time and energy by bringing all your marketing operations under one roof.
Finally, if your marketing is effective enough to make online sales, you must make sure that the users’ purchase experience is seamless. Areto and Pagseguro are both excellent ways to ensure that purchases made on your website go through smoothly. Just make sure that your payment gateway is relevant and accessible in the countries where you run your business.
Method #2: How to Develop Passive Income or Income-Producing Assets
This is the kind of money-making system that requires limited involvement on your end. It is when you invest time and effort in the beginning to create a self-sustaining system that keeps generating income without needing your attention. Here are a few ideas on how to earn money without extra work:
1. Rent Out Extra Space or Property
If you have any kind of extra space that you are not using, it can be rented out as a way of building wealth from nothing. Extra space can be your guest bedroom, lawns for small parties, any closed area for a group workout, yoga, kids’ activities. If you have an extra room in your house that you can rent out, check out services like The house shop or HouseWeb to help you find reliable tenants. Depending on where you live, you may have to pay taxes on this extra income.
You can also invest in real estate and rent it out through these services:
- Corporate Housing by Owner
- All Property Management
- Blueground (US)
- Yopa (UK)
- City Relay
2. Rent out Your Stuff
This is an especially good idea for those who have a lot of stuff lying around that is barely used. It is a way of literally creating wealth from nothing. You can rent out your party materials, large cooking vessels, furniture, etc. for small parties, gatherings, or corporate events. You can even put your vehicle on rent. There are many sites and agencies that can help you do this.
3. Buy and Rent Out Vending or Gaming Machines
If you can figure out the right place to install the vending machine, you will be able to gain a good passive income. You can customize items dispensing through your vending machine, by surveying the people where you are going to install it. You can hire people to look after the machine. If you have a play station, you can make it available on rent too. These are great solutions to how to build wealth.
4. Laundromat Services
Laundromat services are the self-service laundry, coin laundry where clothes are washed and dried without any professional help. Consider buying an existing set up if you have the resources. Although the initial investment in this set up is high, it is a turnkey business idea for passive income.
5. Write a Book
Use services like Jutoh to write a book or eBook, then try to get it published through an existing publishing company such as IngramSpark. Either way, you can keep making money as long as the book sells. Put it up on marketplaces like Amazon and promote it through social media channels for better sales.
6. Database Sales
Many businesses need leads to develop their business. You can build databases using surveys, Google Forms and the likes. These databases can then be sold as leads to companies if the data about these leads is clear and easy to sort. If you’re good at database management, you could easily make money doing this.
7. Create Mobile Apps
If you’re good at building mobile apps, consider creating apps of games or utilities that can be downloaded far and wide. You can earn passively from the ads that run on your app!
8. Drop Shipment
Drop-shipping is becoming a popular business nowadays. You just need to take customer’s orders through your virtual stores, pass them to either the manufacturer or wholesaler. These manufacturers/ wholesalers then ship the order directly to the customer by using the details provided by you. You need not stock up the products. The only thing you need to do is, organizing the customer’s orders and details regarding it. You will earn good money, as an initial investment and other responsibilities are less.
9. Create a Course on Udemy
Udemy is an e-learning platform where you can launch your course by merely creating videos on the specific subject of your interest, and allow users to buy it. This is an excellent option for those who are highly knowledgeable in a particular subject or topic. It’s a great way to turn basic tutoring into passive income.
10. Sell Your Photos
If you are good at photography, then stock photo websites are the option you can consider. The beautiful photographs at sites, blogs, etc. get their photos from stock photo websites. You need to submit your photos to these websites and quickly earn a commission when someone purchases one of them. Here are a few stock photo sites you can sell your work on:
- Freepik US
- Freepik UK
11. Affiliate Marketing
Affiliate Marketing is the technique of collaborating with a company (becoming their affiliate) to earn commission on a product. If you have popular social media accounts, websites, blogs, or other online properties, you can sign up for affiliate marketing programs with various companies.
12. Peer To Peer Lending
When it comes to earning money, more is less. Peer-to-peer lending, also known as P2P lending is an online system that allows you to directly lend money to individuals as well as businesses who are in search of funds. It provides you better returns than a bank will offer you on your deposits.
Rocket Dollar, which allows P2P lending, matches borrowers and lenders with matching needs like interest rates and terms of loan. Once you find borrowers you want to lend to, Rocket Dollar facilitates the lending process and helps you ensure you get your money back with interest. You can also check out NextSeed for similar opportunities.
13. Make Your Car an Advertising Tool
Nowadays, businesses leave no stone unturned for marketing their products and services. They offer to pay the individuals who place their advertisements on their cars. If you own a car and travel a lot, this option is worth giving a thought as you can deploy your car for earning income for you by just placing advertisements on your car.
14. Register Your Car with a Taxi Aggregator
If you have recently purchased a car but are not using it anymore you might think it’s worthless. Well, it can help you earn some regular income. All you need to do is register your car with a taxi aggregator. The aggregator companies even help you find a driver that would be driving your car for you. This helps you generate income on every trip that your driver completes for you.
15. Open a High Yield Savings Account
Some may argue that investing in saving accounts is not going to make much difference to your wealth. But we differ in opinion since with digital banking coming as a revolution in the banking world, earning higher interest on your online savings accounts has become possible now. So you must choose a banking channel that not only provides you reliable services but also offers you a higher interest rate. CIT Bank is a great option providing a 1.25% Annual Percentage Yield (APY).
16. Invest in REIT
Apart from directly investing in real estate, you can invest in trusts that own and manage the real estate properties and then reward their investors with the returns. These trusts are known as Real Estate Investment Trusts (REITs). Not everyone has the time and knowledge required to safely invest in physical properties. That is why you can choose to invest in the units of REITs like Real Estate Wealth Builder (REWB). The income REWB earns through rent, interest, capital gains, etc. is distributed amongst the unit holders based on their holding.
17. Run Ads on Your Website
If you own a business and have a well-recognized website, you are lucky not just because you have a good level of audience but also because having such a popular website can help you earn some really good amount of passive income. Some businesses would be ready to pay you well for placing their advertisements on your website. You need not limit yourself to just one ad since more ads mean more money. However, be wary of overpopulating your website with ads since that may make your website less authentic.
18. Resell Domain Names
Investing in domain names can be a profitable deal in today’s tech-savvy world. Buy a domain name using BigRock that involves some generic names of products or services. This will help you increase the worth of the domain name at a later stage. But make sure you are not infringing any copyright while you select a domain name. After a while you can carry out an online auction and get a good deal for your domain name.
19. Invest in Dividend Stocks
Some companies around the world manage to pay dividends to their stockholders consistently every year. Investing in these is a great way to earn passive income. Services like Trading Lesson and Top Dog Trading help you learn how to find such companies and invest in them. Once you know the basics, you can head over to Scottish Friendly, Motley Fool, Algo Signals (Italian), Morningstar Inc., EasyMarkets, Public, or WealthSimple to start investing.
20. Acquire and Sell Websites
Acquire a website for a lower price and later on sell it after adding a little value to it. You need not work on the website yourself. Instead, you can use services like ProteusThemes and upgrade the website yourself. An improved look will gain more value for the website. You can then sell the website for a profit.
21. Deal in Certificates of Deposits
Money market instruments like certificates of deposits (CDs) are a great deal to earn passive income. CDs are issued by the banks for raising short-term finance. They are low-risk investment options and provide you with good interest rates. The tenure of the deposits usually ranges from one to six months. The interest rates will be higher when you let the banks use your money for a higher period, and vice-versa.
22. Invest Amounts in Annuities
When it comes to securing a source of regular passive income, annuities are a sound option. It is an investment product offered by insurance companies in which you get regular income (say monthly) on your initial lump-sum payment. The payouts can either start immediately or after some time, depending on whether you choose an immediate annuity or a deferred annuity. You can decide a term for which your annuities are to continue and you can also choose a lifetime annuity.
23. Become an Angel Investor
Being an angel investor means choosing a company that is worthy of investing keeping in mind the potential of the business idea that it is based on, and investing capital in such a company. You earn returns on the capital that you invest in. Get connected with such companies that are looking for cash flows for their expansion and have sound prospects of growth.
24. Trade Licensing Rights
You need not be a singer or an artist to sell and make money out of your rights over music or the artwork. Alternatively, you can connect with singers and other artists to buy licensing rights from them. You can then select an audience that has similar interests and earn a profitable deal by placing the licensing rights in an auction.
25. Invest in Bonds
A smart investor always looks for diversification in his portfolio. Investing in bonds not only diversifies your portfolio for good but also helps you achieve a steady flow of income. Companies sometimes instead of borrowing from banks, issue debt instruments such as bonds. The holders of bonds become entitled to the interest that is paid in regular intervals like monthly, quarterly, yearly, etc. Bonds carry a specific tenure after which the holder gets repaid the principal amount as well. You must take a look at the services offered by Public, EasyMarkets, Scottish Friendly, Algo Signals (Italian), Motley Fool, Morningstar Inc., or WealthSimple for help in this regard.
26. Explore High-Income Generating Mutual Funds
Mutual funds are better for those who don’t have much experience in trading. Mutual funds invest in various investment products such as stocks, bonds, indexes, government bonds, etc. Thus, by investing in mutual funds, your investment is automatically diversified. Since the funds are managed by professional fund managers, it doesn’t require your efforts, and the income that is generated on the funds is appropriated towards the unitholders. You can take advantage of Scottish Friendly and Motley Fool for this.
27. Go for Index Funds
Indexed Funds are passively managed in the sense that they invest in the stocks that form part of a particular stock index and in the same proportion as contained in the index. The fund is thus able to work on a similar pattern as the index and earn similar returns. Thus, they are a good choice when it comes to earning passive income.
28. Park Money in Fixed Deposits
Do not let your money sit idle. Fixed deposits are indeed one of the safest options for generating extra income on your idle funds. You can decide the tenure for which you want to invest in the deposits based on which the bank will offer you the interest rates. Also, banks offer you options regarding the receipt of interest payments. You may opt to receive it during periodic intervals or you can opt to reinvest it. If you choose to reinvest the interest portion, it will increase your principal amount and yield more interest which seems to be a smart choice. You can compare the interest rates being offered by various banks and choose a trustworthy one that provides you the highest interest rate.
Method #3: Hybrid of Starting a Business & Investing Smartly
Make no mistake — starting a business is not easy and neither is investing your money. Both require a massive investment of time and seriously hard work. If you’re thinking about doing a hybrid of the two, be advised that you may be biting off way more than you can chew. Here are two things to think about if you’re planning to create your own hybrid method of running your business and investing simultaneously:
1. Manage Finances Carefully
Remember that both these methods come with a comprehensive set of risks tied into their very nature. While it is good to hope for the best and go all-in after your goals, you also need to be practical about the possibilities. Make sure you have enough of your capital kept safe from risk or loss so that you can get back on your feet even in case something goes wrong with your business or your investments. You will need to run a tight ship on both accounts if you want to be successful.
2. Time Management
As I said earlier, both these methods are extremely time consuming, at least at first. Make sure you have a realistic idea of how long things take to get done so that you are protected from the risks that come with overenthusiasm. Find ways to delegate things in both, your business venture as well as managing your investment portfolio. That will leave you with more time to do other things. Believe me, no amount of time is ever enough when you’re looking to become a millionaire. So it makes sense to try and free yourself from things that others can perhaps do better than you would.
As mentioned before, these are some of the simple tips and tricks I used to become a millionaire on my own. I hope this article has helped you understand the various options you have to make enough money to become a millionaire.
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