Become a millionaire

Characteristics of a Millionaire

There are certain characteristics that virtually every self-made millionaire has:

1. Patience. It is nearly impossible to become a millionaire overnight. Getting rich takes time. For example, you must be patient to finish years of schooling or to wait for the interest to compound on your investments.
2. Perseverance. To persevere means that you work towards a goal until it is accomplished. If you are going to become a millionaire, you must be committed for the long haul. Consider it a marathon; you can’t just give up two years into the process if you’re on a five year track.
3. Hard Work. Becoming a millionaire will probably require long nights and tough decisions. You may have to work on weekends or find a second job. Or if you’re in school, you’ll need to do whatever it takes to be at the top of your class.
4. Sacrifice. You’ll need to give up some of what you want now to have more of what you want later. These sacrifices may include a new car, a summer vacation, or dinners out. They may also include giving up some time with friends or family.
5. Courage. It takes guts to step out of your comfort zone, even when stepping out is the only way to achieve your goals. For instance, applying to the top schools in your field or for a promotion takes courage. After all, you could and probably will be rejected at least once. What’s more is you need to come back from rejection and try again if you want to change your life. The difference between those who are successful and those who fail is often simply that the successful ones just kept trying.

Ways of how to become a millionaire

1. Earn Income.

Clearly, the more money you make, the faster you can reach that milestone, but that doesn’t mean your average Joe with a average income can’t obtain millionaire status. The current median income in this country ranges between $35,000-$60,000 depending on where you live. Better yet, get married so you have dual incomes. The wonderful thing about having dual incomes is that even with two people in the household, your income may double, but your expenses typically don’t.

If you don’t earn even an average income, all is not lost. It is up to you to do something about it. A negative attitude about your job or your earning potential won’t change anything. Be proactive and make the decision to improve your situation. It is your life, so take control and realize that things don’t change overnight. It may take a few years of slow growth before you reach the point where you want to be, but you can do it if you try. Remember, short of inheriting money from a relative or winning the lottery, you will need reasonable income to become a millionaire.

2. Live Within Your Means.

Ok, so you have income but now what? It doesn’t matter how much money you make if you spend it all or spend even more than you make. It might be nice to eat out at nice restaurants every night, or to always be on the cutting edge of designer fashion but, this will only make you look like millionaire to others instead of actually being a millionaire. This doesn’t mean you have to live a miserable and miserly lifestyle, but you simply need to live reasonably. The bottom line is buying things and acting like a millionaire if you aren’t will simply empty your bank account and give people a false impression of your status, but that’s it.

Start by purchasing a home that you can comfortably afford and drive vehicles that suit your lifestyle without straining your budget. You don’t have to be pulling down $75,000 a year and drive a 1992 Civic Hatchback or live in a dump, but throwing your money at a 4,000 square foot home in a gated community with luxury cars or SUVs that cost as much as one year of your salary won’t help you become a millionaire. Some may argue that an expensive home and real estate in general is a good way to become a millionaire, but I will touch on that later.

3. Save, save, save

The end result of your financial plan should be systematic investment. Get in the habit of saving money. Build an emergency fund in a money market account so you don’t have to raid the rest of your savings and investments when there’s an unexpected major expense. Make it a point to save at least half of every pay raise.

4. Live below your means

Don’t be a walking billboard for overpriced designer clothes, shoes, sunglasses or jewelry. Don’t allow your house or car payments to be budget-busters.

5. Lay off the credit

Some people say that if you can eat it or wear it, don’t put it on your credit card. That’s good advice, but take it further. Try not putting anything on your cards that you can’t pay off in two or three months. You need only one or two credit cards. If you have a fistful, pay them off. Remember, debt holds you back.

“It reduces cash flow for other things, including investing,” says Welch. “If no one gave you money to borrow, you’d be better off and the economy would be smaller. If they only let you borrow 75 percent of the value of your home, you’d be a heck of a lot better off.”

6. Make your money work for you

It takes money to make money, but that doesn’t mean you need a lot to invest. Open an account with a mutual fund company that has no-load funds and low expense ratios. Build a diverse portfolio and you can reasonably expect to earn 8 percent to 10 percent annually on your investments over the long haul.