Everyone dreams of becoming rich and having a million dollars. For most people, it will remain a dream. You can convert a dream to reality only if you have a plan of action. Making your first million is a big target that you need to work hard to reach. If you can earn a million, then adding a few more millions to it will not be so tough. It is earning the first million that we will talk about.
How do you make a million dollars? Excluding winning a lottery or robbing a bank, the best way to make a million is by working hard for it. You may say that you work hard but have not been able to make a million. It is not just working hard, there are many other things involved in making a million dollars. Let’s look at how to it.
The secret formula to make a million
The formula for becoming a millionaire is simple – Earn, Save, Invest, Repeat. That is all there is to becoming a millionaire. You need not work as a Vice-President at a bank to become a millionaire. You can do what you are good at and still become a millionaire by following the above formula. It is a simple formula that smart people use to become rich. You cannot expect to become rich overnight. It takes time, but it is a sure way of earning a million.
The starting point of earning a million is to earn some money regularly. An assured income every month ensures that you have money for your needs and wants. Once you achieve this, you can then proceed further. You need a job that pays you well. Don’t worry if you are not earning a huge sum. Start with any job that gives you an income. Learn on the job and work hard to get promoted. The more experience you gain and the more you learn, the greater is your chance to increase your earnings.
If you are determined to achieve your goal of earning a million, don’t be content with one income source. You can work at a day job to earn a salary. You can spend your evenings and weekends doing part time work to earn an additional income. Various organizations need part-time staff. It suits them as they can pay only for the work done, instead of paying a monthly salary. If you have a vehicle, you can work for a food delivery company like Uber Eats or even for Amazon to deliver products to customers in your free time.
If you have specific skills like programming, web design, writing, or graphic design you can take up freelance work to do in your spare time. Freelance jobs are available through websites like Freelancer, Upwork, and Fiverr. There are professional companies that outsource extra work to freelancers. If you look around, you can definitely find freelance jobs that you can complete in your free time.
The potential to earn is unlimited. All it needs is a plan on how to earn and you need to make a sincere effort. You can run a business part-time while working for a salary. You can run an online business selling products you make at home. You can start your own business and operate it evening and weekends. You can rent out a room in your house to tourists through Airbnb. There are multiple ways of earning money. The more you earn, the faster you can make a million.
Once you earn money, you will have to spend it for your essential needs. You may also have wants like buying a car, going on a vacation, going for a movie, eating out, etc. Once you spend on all this, what is left over is your savings. The savings are going to help you earn a million. So, let’s focus on the savings.
You need to ideally save 20% of your income. The faster you want to make a million, the more you need to save every month. Most people spend money on unnecessary expenses. If you make a comprehensive list of all your expenses and sit down with your family, you can decide how to cut down expenses. There are various ways of doing this. You can look for bargain shopping to save on grocery bills. You can make sacrifices by cutting down on leisure expenses.
The objective should be to save as much as possible. If you can save 30-40% of what you earn, you can look forward to becoming a millionaire quickly.
Money saved in a bank account or kept in your locker won’t make you rich. You need to invest your savings to convert it to a million. There are numerous investment options like bonds, real estate, gold, etc. The best way to make a million is to invest money in the stock market. This is where you can earn the highest returns on your investment. Of course, there is a risk involved but you cannot expect rewards without any risk.
You can invest your money intelligently to buy stocks or shares in mutual funds. This can help you earn good returns over a period. You should not expect to double your money in five years. It is unrealistic. With a disciplined approach, there is no reason you can’t earn a million in 20-30 years. If you can’t wait so long, then you need to save more and invest more to earn faster. If you can invest just $1000 every month in the stock market, you can earn a million in around 20 years[i].
It is not enough saving and investing once. You need to do it month on month, year after year. When you do this in a disciplined way, you can very easily earn your first million dollars. Hard work to earn money, sacrifices to save money, disciplined investment, and patience as you wait for your money to grow will help you make a million dollars easily.