Dreaming of becoming a self made millionaire?
You have the money. You have the time and resources to do whatever you want and whenever you want. You live a big mansion in Beverley Hills and there is a $200,000+ Ferrari parked in your driveway.
You sit court side at basketball games and have luxury suites for football games. And when you travel, you travel first class. Best of all, you are free. You don’t need to work 9 to 5.
For most of you, unfortunately, this is only a dream. Unless, of course, you can fix the following 9 obstacles preventing you to become a self made millionaire. If you’re serious about becoming a millionaire, you may want to work with a financial advisor, to help developing a plan to reach your financial goals.
This article will explain the main reasons why you will never be a self made millionaire, and how to take immediate actions to change that.
Common Reasons Why Becoming a Self Made Millionaire is Impossible:
1. You rely solely on your job.
Your job will never make you rich, unless of course you have one of those jobs, like working as an investment banker where your bonus alone is in the millions. So how can you become a self made millionaire if you’re not an investment banker, a CEO for a major corporation, a surgeon, etc..?
One of the answers is that you need to create multiple passive income streams.
What is passive income?
Passive income is income you earn without being actively involved. Whereas active income is income you earn while you are actively involved. Earning income from working at a 9-to-5 job is active income; earning income from collecting rent as a landlord is passive income.
Millionaires have multiple streams of income, like real estate investment, having their own businesses, stock investments, etc…
Speak with the Right Financial Advisor
Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with fiduciary advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is legally bound to act in your best interests. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
How to create multiple streams of income: start making a list of multiple streams of income you’d like to have. For example, you can start by owning a duplex, where you live in one unit and rent the other unit. Thereby collecting passive income from the monthly rent.
To start with real estate investment, you’re most likely going to need a mortgage loan.
Click here to compare mortgage rates through LendingTree. It’s completely FREE.
Another way to create a passive income stream is to create a blog. A blog, regardless of the niche, can provide you with tremendous amount of income. A blog requires a lot of time and work to succeed. It can take quite a while before you start making money as a blogger.
Once your blog becomes popular, it gives you the platform and audience to generate multiple streams of revenue by monetizing your blog.
I created my WordPress blog on Bluehost. BLuehost is one of the best hosting companies out there. You can start your blog with Bluehost for as low as $3.95 a month. The regular price is $7.99 a month, but you get it for $3.95, which is 50% off the regular price.
2.You don’t have a budget.
You need a budget if at the end of the month, you have no money left in your bank account. That could be a sign that you’re spending too much on things you don’t want or you’re spending on things you can’t afford.
If that is the case, then use a money management app to stay on top of your spending.
3. You don’t save enough.
Saving your money in order to invest it is one of the best ways to build wealth. The opposite of that can also be true: not saving your money is almost always something that will destroy your prospect of becoming a self made millionaire. Some people never save. They just spend money recklessly.
Granted, some people don’t spend their money recklessly, they just don’t have anything left to save at the end of the month. But failure to save at least a minimal amount, is nearly impossible to become a self made millionaire.
4. You spend too much.
If at the end of every month, you have no left over and you are still broke, you probably spend too much. It doesn’t matter how much you get paid every pay period. You can get paid $500 a week or $10,000 a week, you have to spend less than you make. In other words, you have to live below your means in order for you to reach the millionaire status.
Millionaires understand that they have to live on less than they make. Instead of spending that bonus money or tax refund on frivolous things, they put that extra cash to work through various investment vehicles, such as stocks, real estate, their businesses or other assets.
5. You’re in the wrong profession.
You’re less likely to become a self made millionaire if you’re a social worker or a teacher. You just don’t get paid enough. Whereas, if you’re a lawyer or a doctor, you have a better chance of joining the millionaire club.
How to fix it: if you’re still in school, choose a major in politics or finance to improve your chance of earning a lot of money.
6. You don’t invest.
Millionaires understand that in order to generate wealth, they have to invest their money. Putting your money under a mattress or a regular savings account will not make you a millionaire.
How to fix it: Invest now. The earlier you start investing, the more likely your money can grow, thanks to ‘compounding interest.’ When it comes to growing your money, time and compound interests are your best friends.
The more time you spend without investing, the less likely you will be a self made millionaire. If you are in your early 20’s or late 30’s, you should start now, even if you only can start with a small amount of money. Investing in stocks will help you reach the millionaire status.
To start off, I’d recommend using Acorns to invest your spare change.
7. You don’t have a good work ethic.
The millionaire or the wealthy did not become wealthy or rich by chance or by accident, unless of course they won the lottery or inherited a large sum of money. The path to become a self made millionaire requires hard work, persistence despite failure, discipline and courage. Successful and rich people know early on that becoming rich is not easy.
If you wan to build wealth and be a self made millionaire, you have to have a good work ethic.
8. You don’t invest in yourself.
Many people think that once they’re done with school (undergraduate or graduate school), they are done with education. That’s a mistake. You should never stop learning. Even if you’re busy, find ways and the time to learn about things in your field. Millionaires never stop learning, no matter how busy they are.
The Bottom Line….
Becoming a self made millionaire is not impossible. In fact, it can be easy of you have a good work ethic and follow the steps above. If you want to become a self made millionaire, then invest in yourself, live below your means, invest in stocks, create multiple streams of income, and stay debt free. You’ll eventually get there!
While working on becoming a self-made millionaire, here’s what you can do in the meantime:
First, you can try to make some extra money.
This extra money can help pay small bills, like phone bill, cable bill or even pay credit card debts. You can earn extra cash by completing online surveys.
Second, you can start a blog.
If you’re interested in earning passive income, then you need to create your own blog. It’s one of the best ways to make money while you sleep.
Starting a website with Bluehost takes less than 15 minutes and hardly costs anything. And there are several ways to monetize your website.
Read our step-by-step guide on how to start a successful blog in 15 minutes. It’s one of the best passive income streams you can have.
Third, If you’re thinking of buying a house, estimate how much you may be able to borrow. Get pre-qualified.
Fourth, maintain a good credit score.
A good credit score of 730 means that not only will you able to get qualified for mortgage loan, it also means you’ll get qualified for a better interest rate. And being able to get a better interest rate means that you will have lower monthly mortgage payments. This, in turn, means that you’ll save thousands of dollars on interests.
Get matched up to 3 Financial Advisors
You can talk to a financial advisor who can review your finances and help you save 100k (whether you need it to pay off debt, to invest, to buy a house, or plan for retirement, saving, etc). Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.