For most of us, when we think about what it takes to become a millionaire, we tend to think that in order to become a millionaire, we have to save our money, pay off debt, invest money, and live below our means.
However, focusing solely on these things will not make you a millionaire without the following six factors.
The following factors are not a guarantee that you will become a millionaire. But they are a good indicator whether you have a better shot at becoming rich than others.
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6 Factors Determine Who Gets to Be a Millionaire
Factor # 1: You Have to Have a Source of Income
The first factor when it comes to your chance of becoming a millionaire is that you have to have a source of income. Whether it’s working a 9 to 5 job, or have your own business, you have to have some type of money coming in.
No one ever becomes a millionaire by not earning money, unless of course you were born into riches, you inherited wealth, or you won the lottery.
Otherwise you need an income. If you want to earn some extra cash, then look at some methods of making extra money. After all, we are building wealth; making an extra hundred bucks every month could have a huge impact on your millionaire status.
Not only do you need a source of income, you also need to increase your income. As Grant Cardone once said, “In today’s economic environment, you cannot save your way to millionaire status…the first step is to focus on increasing your income in increments and repeating that.”
Fortunately, there are several ways to increasing your income like investing, getting a good job, starting your own business or side hustling.
Factor #2: Your Time Horizon Determines Whether You Will Be Rich
A 20 year old with no money and no assets has a better shot at becoming a millionaire than a 45 year old with no money and assets. Plain and simple. That 20 year old still have time to invest his or her money aggressively in the stock market.
He or she can start a business. Even if that business fails, he or she has time to start another one.
For a 45 year old, on the other hand, time is his or her greatest enemy. At this time, she has little room to take big risks, like investing in the stock market and opening her own business.
Factor #3: A Career in Investment Banking Increases Your Chances of Becoming a Millionaire Than A Career in Social Work.
Your odds of becoming a millionaire depend a lot on what your career is. Some jobs simply more than others. For example, an entry-level social worker, earning $35k a year is very unlikely to become a millionaire later in life.
Whereas an entry level investment banker making $100k a year has a way better shot at becoming a millionaire. The lifetime gain for an investment banker can be significant.
If you want to increase your chance of becoming a millionaire, then choose a high-paying career path. Check out salary calculators to figure out your income potential in various careers.
Factor #4: Individuals Who Earn Higher Incomes Are More Likely To Become A Millionaire.
Similarly to factor # 3, it’s not terribly surprising that high-earning income people are more likely to become a millionaire later in life. Assuming the high income earners have the same monthly expenses as the lower income earners, they have a better shot.
They have more money left over to take more investment risks, to open their own business, to seek the best financial advice, etc.
Factor #5: Investing With a Long-Term Focus
Increasing your chances of becoming a millionaire also depends on whether you have a long term focus rather than a short term focus when it comes to investing. The millionaire attains their status by focusing on long term goals rather than short term goals.
They are focused on making their money grow over time, rather than worrying about what is happening to their money at the moment.
Having a long term focus is crucial when it comes to reach the millionaire status.
Factor #6: Your Investing Style Tells You Whether You Will Become Rich.
Another factor of the millionaire is his or her investing style and tolerance for risk. After all anyone can be an investor. An investor is someone who puts his or her money into an investment product in the hope of increasing their capital or getting an income. What that means is that just about everyone invests, even if it’s money in your savings account.
But what sets the millionaire apart from the average investor is that the millionaire invests very aggressively; take on more and high investment risks.
They understand that there is potential to greatly grow their money even if it means taking on higher risk. They are confident and prepared to take a calculated risk.
You will never be a millionaire if you ‘play it safe.’ They are hands on on their investments and if they don’t have the time, they hire a professional adviser. They invest in stocks they understand. Again, if they don’t understand something, they seek personal financial advice.
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